Druid perspectives on nature, culture, and the future of industrial society

Wednesday, October 16, 2013

The One Option Left

The recent round of gridlock in Washington DC may seem
worlds away from the mythological visions and spiritual perspectives that have
been central to this blog over the last few months. Still, there’s a direct
connection. The forces that have driven American politicians into their current
collection of blind alleys are also the forces that will make religious
institutions very nearly the only structures capable of getting anything done
in the difficult years to come, as industrial civilization accelerates along
the time-honored trajectory of decline and fall.

To make sense of the connection, it’s necessary to start
with certain facts, rarely mentioned in current media coverage, that put the
last few weeks of government shutdown and potential Federal default in their
proper context. These days the US government spends about twice as much each
year as it takes in from taxes, user fees, and all other revenue sources, and
makes up the difference by borrowing money.Despite a great deal of handwaving, that’s a recipe for disaster.If you, dear reader, earned US$50,000 a year
and spent US$100,000 a year, and made up the difference by taking out loans and
running up your credit cards, you could count on a few years of very
comfortable living, followed by bankruptcy and a sharply reduced standard of
living; the same rule applies on the level of nations.

Were you to pursue so dubious a project, in turn, one way to
postpone the day of reckoning for a while would be to find some way to keep the
interest rates you paid on your loans as low as possible. This is exactly what
the US government has done in recent years. A variety of gimmicks, culminating
in the current frenzy of “quantitative easing”—that is to say, printing money
at a frantic pace—has forced interest rates down to historically low levels, in
order to keep the federal government’s debt payments down to an annual sum that
we can pretend to afford. Even a fairly modest increase in interest rates would
be enough to push the US government into crisis; an increase on the same scale
as those that have clobbered debt-burdened European countries in recent years
would force an inevitable default.

Sooner or later, that latter is going to happen.That’s the unmentioned context of the last
few cycles of intractable financial stalemates in Washington. For more than a
decade now, increasingly frantic attempts to kick the can further and further
down the road have thus been the order of the day.In order to prevent a steep economic
contraction in the wake of the 2000 tech-stock crash, the US government and the
Federal Reserve Board—its theoretically independent central bank—flooded the
economy with cheap credit and turned a blind eye to what became the biggest
speculative delusion in history, the global real estate bubble of
2004-2008.When that popped, in turn,
the US government and the Fed used even more drastic measures to stave off the
normal consequences of a huge speculative bust.

None of those measures has a long shelf life. They’re all
basically stopgaps, and it’s probably safe to assume that the people who
decided to put them into place believed that before the last of the stopgaps
stopped working, the US economy would resume its normal trajectory of growth
and bail everyone out. That hasn’t happened, and there are good reasons to
think that it’s not going to happen—not this year, not this decade, not in our
lifetimes. We’ll get to those reasons shortly; the point that needs attention
here is what this implies for the federal government here and now.

At some point in the years ahead, the US government is going
to have to shut down at least half its current activities, in order to bring
its expenditures back in line with its income. At some point in the years
ahead, equally, the US government is going to have to default on its $8
trillion dollars of unpayable debt, plus however much more gets added as we
proceed. The shutdown and default that have absorbed so much attention in
recent weeks, in other words, define the shape of things to come.This time, as I write these words, a
temporary compromise seems to have been slapped together, but we’ll be back
here again, and again, and again, until finally the shutdown becomes permanent,
the default happens, and we move on into a harsh new economic reality.

It’s probably necessary at this point to remind my readers
again that this doesn’t mean we will face the kind of imaginary
full stop beloved by a certain class of apocalyptic theorists. Over
the last twenty years or so, quite a few countries have slashed their
government expenditures and defaulted on their debts. The results have included
a great deal of turmoil and human suffering, but the overnight implosion of the
global economy so often predicted has failed to occur, and for good reason.
Glance back over economic history and you’ll find plenty of cases in which
nations had to deal with crises of the same sort the US will soon face. All of
them passed through hard times and massive changes, but none of them ceased to
exist as organized societies; it’s only the widespread fixation on fantasies of
apocalypse that leads some people to insist that for one reason or another,
it’s different this time.

I plan on devoting several upcoming posts to what we can
realistically expect when the US government has to slash its expenditures and
default on its debts, the way that Russia, Argentina, and other nations have
done in recent decades. For the moment, though, I want to focus on a different
point: why has the US government backed itself into this mess? Yes, I’m aware
of the theorists who argue that it’s all a part
of some nefarious plan, but let’s please be real: to judge by
previous examples, the political and financial leaders who’ve done this are
going to have their careers terminated with extreme prejudice, and it’s by no
means impossible that a significant number of them will end up dangling from
lampposts. It’s safe to assume that the people who have made these decisions
are aware of these possibilities. Why, then, their pursuit of the
self-defeating policies just surveyed?

That pursuit makes sense only if the people responsible for
the policies assumed they were temporary expedients, meant to keep business as
usual afloat until a temporary crisis was over. From within the worldview of
contemporary mainstream economics, it’s hard to see any other assumption they could
have made. It’s axiomatic in today’s economic thought that economic growth is
the normal state of affairs, and any interruption in growth is simply a
temporary problem that will inevitably give way to renewed growth sooner or
later. When an economic crisis happens, then, the first thought of political
and financial leaders alike these days is to figure out how to keep business as
usual running until the economy returns to its normal condition of growth.

The rising spiral of economic troubles around the world in
the last decade or so, I suggest, has caught political and financial officials
flatfooted, precisely because that “normal condition of growth” is no longer
normal. After the tech-stock bubble imploded in 2000, central banks in the US
and elsewhere forced down interest rates and flooded the global economy with a
torrent of cheap credit. Under normal conditions, this would have driven an
investment boom in productive capital of various kinds: new factories would
have been built, new technologies brought to the market, and so on, resulting
in a surge in employment, tax revenues, and so on. While a modest amount of
productive capital did come out of the process, the primary result was a
speculative bubble even more gargantuan than the tech boom.

That was a warning sign too few people heeded. Speculative
bubbles are a routine reality in market economies, but under ordinary
circumstances they’re self-limiting in scale, because there are so many other
less risky places to earn a decent return on investment. It’s only when an
economy has run out of other profitable investment opportunities that
speculative bubbles grow to gargantuan size. In the late 1920s, the mismatch
between vast investment in industrial capital and a wildly unbalanced
distribution of income meant that American citizens could not afford to buy all
the products of American industry, and this pushed the country into a classic
overproduction crisis. Further investment in productive capital no longer
brought in the expected rate of return, and so money flooded into speculative
vehicles, driving the huge 1929 bubble and bust.

The parallel bubble-and-bust economy that we’ve seen since
2000 or so followed similar patterns on an even more extreme scale. Once again,
income distribution in the United States got skewed drastically in favor of the
well-to-do, so that a growing fraction of Americans could no longer support the
consumer economy with their purchases. Once again, returns on productive
investment sank to embarrassing lows, leaving speculative paper of various
kinds as the only option in town. It wasn’t overproduction that made productive
capital a waste of investment funds, though—it was something considerably more
dangerous, and also less easy for political and financial elites to recognize.

The dogma that holds that growth is the normal state of
economic affairs, after all, did not come about by accident. It was the result
of three centuries of experience in the economies of Europe and the more
successful nations of the European diaspora. Those three centuries, of course,
happened to take place during the most colossal economic boom in all of
recorded history. Two factors discussed in earlier posts drove that boom:first, the global expansion of European
empires in the 17th, 18th, and 19th centuries and the systematic looting of
overseas colonies that resulted; second, the exploitation of half a billion
years of stored sunlight in the form of coal, petroleum, and natural gas.

Both those driving forces remained
in place through the twentieth century; the European empires gave way
to a network of US client states that were plundered just as thoroughly as
old-fashioned imperial colonies once were, while the exploitation of the
world’s fossil fuel reserves went on at ever-increasing rates. The peaking of
US petroleum production in 1972 threw a good-sized monkey wrench into the gears
of the system and brought a decade of crisis, but a variety of short-term gimmicks
postponed the crisis temporarily and opened the way to the final extravagant
blowoff of the age of cheap energy.

The peaking of conventional petroleum production in 2005
marked the end of that era, and the coming of a new economic reality that no
one in politics or business is yet prepared to grasp. Claims that the peak
would be promptly followed by plunging production, mass panic, and apocalyptic
social collapse proved to be just as inaccurate as such claims always are.What happened instead was that a growing
fraction of the world’s total energy supply has had to be diverted, directly or
indirectly, to the task of maintaining fossil fuel production.Not all that long ago, all things considered,
a few thousand dollars was enough to drill an oil well that can still be
producing hundreds of barrels a day decades later; these days, a fracked well
in oil-bearing shale can cost $5 to 10 million to drill and hydrofracture, and
three years down the road it’ll be yielding less than 10 barrels of oil a day.

These increased costs and diminished returns don’t take
place in a vacuum. The energy and products of energy that have to be put into
the task of maintaining energy production, after all, aren’t available for
other economic uses.In monetary terms—money,
remember, is the system of tokens we use to keep track of the value and manage
the distribution of goods and services—oil prices upwards of $100 a barrel, and
comparable prices for petroleum products, provide some measure of the tax on
all economic activity that’s being imposed by the diversion of energy,
resources, and other goods and services into petroleum production. Meanwhile
fewer businesses are hiring, less new productive capital gets built, new
technologies languish on the shelves:the traditional drivers of growth aren’t coming into play, because the
surplus of real wealth needed to make them function isn’t there any more,
having had to be diverted to keep drilling more and more short-lived wells in
the Bakken Shale.

The broader pattern behind all these shifts is easy to
state, though people raised in a growth economy often find it almost impossible
to grasp. Sustained economic growth is made possible by sustained increases in
the availability of energy and other resources for purposes other than their
own production. The only reason economic growth seems normal to us is that
we’ve just passed through an era three hundred years long in which, for the
fraction of humanity living in western Europe, North America, and a few other
corners of the world, the supply of energy and other resources soared well past
any increases in the cost of production. That era is now over, and so is
sustained economic growth.

The end of growth, though, has implications of its own, and
some of these conflict sharply with expectations nurtured by the era of growth
economics. It’s only when economic growth is normal, for example, that the
average investment can be counted on to earn a profit. An investment is a
microcosm of the whole economy; it’s because the total economy can be expected
to gain value that investments, which represent ownership of a minute portion
of the whole economy, can be expected to do the same thing. On paper, at least,
investment in a growing economy is a positive-sum game; everyone can profit to
one degree or another, and the goal of competition is to profit more than the
other guy.

In a steady-state economy, by contrast, investment is a
zero-sum game; since the economy neither grows nor contracts from year to year,
the average investment breaks even, and for one investment to make a profit,
another must suffer a loss. In a contracting economy, by the same logic,
investment is a negative-sum game, the average investment loses money, and an
investment that merely succeeds in breaking even can do so only if steeper
losses are inflicted on other investments.

It’s precisely because the conditions for economic growth
are over, and have been over for some time now, that the US political and
financial establishment finds itself clinging to the ragged end of a bridge to
nowhere, with an assortment of alligators gazing up hungrily from the waters
below.The stopgap policies that were
meant to keep business as usual running until growth resumed have done their job,
but economic growth has gone missing in action, and the supply of gimmicks is
running very short. I don’t claim to know exactly when we’ll see the federal
government default on its debt and begin mass layoffs and program cutbacks, but
I see no way that these things can be avoided at this point.

Nor is this the only consequence of the end of growth.In a contracting economy, again, the average
investment loses money. That doesn’t simply apply to financial paper; if a
business owner in such an economy invests in capital improvements, on average,
those improvements will not bring a return sufficient to pay for the
investment; if a bank makes a loan, on average, the loan will not be paid back
in full, and so on. Every one of the mechanisms that a modern industrial
economy uses to encourage people to direct surplus wealth back into the
production of goods and services depends on the idea that investments normally
make a profit. Lacking those, the process of economic contraction becomes
self-reinforcing because disinvestment and hoarding becomes the best available
strategy, the sole effective way to cling to as much as possible of your wealth
for as long as possible.

This isn’t merely a theoretical possibility, by the way. It
occurs reliably in the twilight years of other civilizations. The late Roman
world is a case in point:by the
beginning of the fifth century CE, it was so hard for Roman businessmen to make
money that the Roman government had laws requiring sons to go into their
fathers’ professions, whether they could earn a living that way or not, and
there were businessmen who fled across the borders and went to work as scribes,
accountants, and translators for barbarian warlords, because the alternative
was economic ruin in a collapsing Roman economy. Meanwhile rich landowners
converted their available wealth into gold and silver and buried it, rather
than cycling it back into the economy, and moneylending became so reliable a
source of social ills that lending at interest was a mortal sin in medieval
Christianity and remains so in Islam right down to the present. When Dante’s
Inferno consigned people who lend money at interest to the
lowest part of the seventh circle of Hell, several notches below mass
murderers, heretics, and fallen angels, he was reflecting a common belief of
his time, and one that had real justification in the not so distant past.

Left to itself, the negative-sum game of economics in a
contracting economy has no necessary endpoint short of the complete collapse of
all systems of economic exchange. In the real world, it rarely goes quite that
far, though it can come uncomfortably close. In the aftermath of the Roman
collapse, for example, it wasn’t just lending at interest that went away. Money
itself dropped out of use in most of post-Roman Europe—as late as the twelfth
century, it was normal for most people to go from one year to the next without
ever handling a coin—and market-based economic exchange, which thrived in the
Roman world, was replaced by feudal economies in which most goods were produced
by those who consumed them, customary payments in kind took care of nearly all
the rest, and a man could expect to hold land from his overlord on the same
terms his great-grandfather had known.

All through the Long Descent that terminated the bustling
centralized economy of the Roman world and replaced it with the decentralized
feudal economies of post-Roman Europe, though, there was one reliable source of
investment in necessary infrastructure and other social goods. It thrived when
all other economic and political institutions failed, because it did not care
in the least about the profit motive, and had different ways to motivate and
direct human energies to constructive ends. It had precise equivalents in
certain other dark age and medieval societies, too, and it’s worth noting that
those dark ages that had some such institution in place were considerably less
dark, and preserved a substantially larger fraction of the cultural and
technological heritage of the previous society, than those in which no
institution of the same kind existed.

In late Roman and
post-Roman Europe, that institution was the Christian church. In other dark
ages,other religious organizations have
filled similar roles—Buddhism, for example, in the dark ages that followed the
collapse of Heian Japan, or the Egyptian priesthoods in the several dark ages
experienced by ancient Egyptian society. When every other institution fails, in
other words, religion is the one option left that provides a framework for
organized collective activity. The revival of religion in the twilight of an
age of rationalism, and its rise to a position of cultural predominance in the
broader twilight of a civilization, thus has a potent economic rationale in
addition to any other factors that may support it. How this works in practice
will be central to a number of the posts to come.

Hmm yes. A similar situation to America is brewing in my own country New Zealand. Basically we spend a LOT more than we earn, and though no one likes to admit it, our economy has been steadily contracting for the last 40 years. In the typical disinvest style you just described, our government is busy flogging off our state owned assets to the wealthy (who else can afford them really?)- under the guise of limiting public debt. On the other hand, despite our shrinking economy, our dollar is still high, because foreign currency investors, (for example our prime minister) deem our currency to be a safe one. I dread to think how far we have to fall when the house comes down elsewhere...

Basically what you would propose on the whole is to invest in things outside the money economy? (I am taking up one of your magic courses as we speak).

A really excellent post that summarizes the present US and global economic predicament. I will be forwarding the link to several people as a means of introducing some of the ideas raised in a clear and precise manner.There is however the issue of making a strictly proportional connection between growth and hydrocarbon availability. Western Europeans consume about half the energy per capita of what Americans do with a similar level of technology and material civilization. This suggests that the US has considerable potential to increase wealth creation even without energy growth. For many people in developing countries a very modest investment in alternative energy (e.g. 100 watt solar system) can greatly increase their ability to create wealth in goods and services. Thus although there is no doubt economic stagnation related to peak hydrocarbon energy; in the short to medium term there remains potential for increased wealth creation i.e. growth.

Quote: "since the economy neither grows nor contracts from year to year, the average investment breaks even, and for one investment to make a profit, another must suffer a loss."

This sounds a lot like a well-established and well-ordered village with everyone watching everyone else to ensure that no one is on the make. On a budget of sunlight, someone’s gain is someone else's loss.

Agriculture has the same problem too. It is only possible to produce large surpluses when you can import materials, equipment, resources and energy. Take them away and there is very little surplus to be had. On trashed soils, it can actually be very negative returns whilst you rebuild top soil.

The parallels are fascinating.

I agree with your economic analysis too. Everyone talks about the borrowing, but they tend to ignore the fact that sooner or later borrowings will be used to pay for interest. It is an accelerating and circular problem.

The Chinese and Japanese won't be happy either, as I think they hold something like $1.2tn to $1.3tn of those bonds.

It is very telling that the Chinese have failed to mention this loudly in the media this time around. Especially after they had such a large public backlash last time (which I believe it was reported here recently that the censors are still working on deleting).

If anyone is interested in some photos from here recently and a farm plan to put the place into perspective, you can check out:

I enjoyed that!I've recently, finally, read Graebers Debt; the first 5000 years - a perspective-changing book of the first magnitude. I've become a huge fan of his. His account of the late 20th/early 21st century crises differs somewhat from yours: he argues that these crises tend to arise only when the notion that capitalism cannot fail takes a firm hold of our collective imagination. In other words: these crises only happen when we start to think growth is inevitable. The rise of neo-liberalism and its thinly disguised left-wing equivalent, (Third Way Social democracy) in the nineties, followed by our present straits, certainly fits that hypothesis.

What is even more interesting, to the philosophically-minded, is that his account and yours are equally true.

However, his view of the Middle Ages is a lot less eurocentric than yours - he sees Europe for the economic and intellectual backwater it probably was in those days. This leads to a different assessment of the post-Roman world. He points to the rise of the Islamic merchant adventurers in the Near East (Which he, gently screwing with our minds, calls the Near West, Europe being the Far West).These merchants and their non-interest bearing activities kept the economy going, in a world as post-Roman-collapse as any you could care to mention (please bear in mind that Islam, in those days, was dominant in Spain - one of the westernmost parts of the Roman Empire), and they certainly kept their part of the post-Roman Ages a lot less Dark than Christian Europe became.They were deeply religious, of course, but they were not a religious organistation in any way. So it seems there's more than one way to cope with economic collapse.

I liked your recommendation (from Wealth of Natureof using "dissensus"), everyone using their own strategy to cope with the variegated and unpredictable adaptive landscape to come in a post-abundant world; one might hope the same would be true of religiosity in the post-rational world. The idea I'm shooting for is a "tangled bank" scenario of evolution, containing lots of religious sex. After all, wasn't the belief in progress just a lot of clonal "selfing" to maximize more of the same?

The problem of overproduction was one of the earliest socialist talking-points. It's one of the consequences of rent-seeking — charging for the use of capital, including lending at interest — that the sum of workers' wages is necessarily less than total sales, since that has to pay for both their wages and capitalists' rent on their income. Capitalists do not tend to rededicating 100% of their income back into purchases… so who's buying it all? (The answer of course, is that the public has to go deeper into debt every year to balance the equation.)

The standard pro-rent response is that this is only a problem if the total amount of wealth in the economy is not growing from year to year. True, but that's like saying having a bunch of tapeworms is just fine as long as you keep eating more and more to compensate.

I'm beginning to think you're right that socialism will have its day again reasonably soon. I think a lot of conservative Americans will have a similar experience as I did when first encountering actual socialism, since ironically socialism and American pseudoconservativism both give lip-service to nearly identical ideals of freedom and economic fairness (e.g. keeping what you've earned).

And of course the Latin re-ligare is much more explicit about the function of religion, to bind people together. There's a reason Catholics are Roman!

I asked you once, John, how a system of green wizardry and small sustainable communities would "scale up". That perhaps smacks too much of the reputation engineers have for growth at all costs, but I was really expecting an answer from the grandeur of religions. Not as something to be engineered, but as something that should be allowed to happen.

A lot of engineering thinking needs to be turned on its head, then, and I think a lot can be salvaged and repurposed too. As usual I'm finding your point of view fascinating.

Blogger, it varies up and down from one year to the next, and there's also quite a bit of federal budget outside the ordinary budget request. That's why I used a very general estimate.

Tom, there are two things that reliably work in an age of economic contraction. The first is to be able to do without as much as possible; the second is to be able to provide for as many of your own needs as possible. We'll talk more about that later on!

Bilaal, I'm far from convinced that that's the case, especially in America, but it's a complex issue demanding more discussion than a comment box will allow.

Cherokee, a steady state economy would be the normal state of affairs in a sustainable society, such as the village you've proposed. It may be a long time before we get back to that, though!

Thijs, the Muslim merchants of the early Middle Ages weren't a religious organization, but they benefited immensely from Islam and its institutional structures, as the somewhat later revival of commerce in the backwater nations of Europe (no argument there!) did from Christianity and its institutions. Once you have the framework in place, it's a matter of how far economic contraction goes before things finally stabilize and trade makes sense again; for a variety of reasons, that happened a lot sooner along the shores of the Mediterranean than it did further north.

Mister R., many thanks.

Compound F, it depends very much on the nature of the religious institutions that emerge as the age of rationalism winds down. They may be very diverse, as they were in post-Heian Japan, or relatively intolerant of dissent, as they were in the post-Roman world.

Think Again, yes, I figured we'd hear from the conspiracy lobby. Sure, the very rich are right out there deliberately wrecking the system that gives them all their wealth and power, on the theory that wrecking that system will give them some alleged advantage that outweighs all that it would cost them. I'd encourage you to study history, and notice how many times ruling classes become so isolated from the facts on the ground that they end up fatally detached from the realities of their time, pursuing self-defeating policies under the fond illusion that they know what's going on. That is to say, it's never wise to blame on conspiracy what can adequately be explained by stupidity!

James, no question, Marx' analysis of overproduction is one of his strong points. I expect that we'll hear quite a bit of that once the revival of American Marxism gets under way.

David, you're certainly right that a lot of current engineering thought and practice can be salvaged and put to work in constructive ways -- though it's going to take some serious rethinking. I hope that the engineers reading this blog are getting that process of rethinking under way.

Just a thought about the evil powers that be thing. There's enough freedom in the western world that the only possible leadership is akin to herding cats. Pardon the cliche. Anyway, back in the 70s, the cats were helpfully trying to curb the whole mess and come up with viable backup plans, but that hasn't been true at any time since Carter was turned out of office. Now the cats are all about SUVs and salad shooters. In a society such as ours, the powers that be don't determine our way of life, we do, and we chose the way to ruin. Sure it's comforting to lay the blame on our "leaders", but not really true.

JMGAs usual, a beautifully lucid, scholarly, and thought provoking Blog post. One cannot, however, but wonder at the paradoxical nature of religion which in the dark ages both helped maintain the body of knowledge developed by the classical civilizations, and persecuted free thinking and scientific inquiry at the same time. In addition, some of the worst persecution of non-dominant religions and acts of human depravity occurred during this demon-haunted time. This last point (persecution of alternate religions) must give a Druid pause.

Think again's comment brought to mind Barbara Tuchman's "The March Of Folly" and how the elite's arrogance & hubris & inability to see past the prevailing paradigm, which they are part of, led to disaster, including Britain in N. Am. colonies & U.S. in Vietnam.

@Bilaal Abdullah:From a cursory glance at the USA vs Europe it might seem that in theory it would be possible to reorganise the USA to use considerably less energy.However, this is not so easy in practice, since the American system has a lot of infrastructure which cannot be used without significant amounts of energy. The organisation of the American society on an infrastructure level is quite different from many parts of Europe. Rebuilding for a "European" type society would require large energy inputs, which will not be available on the downside of Hubbert's peak.

As long as the US sovereign debt is denominated in US dollars, I don't foresee a default. They'll just print however much money they need to print, and use it to pay lenders. Of course, that particular strategy involves a currency collapse, which might just have even more devastating consequences than an outright default. But I would argue that, psychologically, printing money is an easier option for decision makers than an outright default, simply because a default is sudden and definite, whereas money printing (and the ensuing currency destruction) is a prolonged process.

Which leaves me scratching my head about what exactly I should do with my US$ denominated savings. Not that I have a huge amount of it (just a few thousand), but I'd kinda prefer it didn't simply evaporate. I could buy euros, but then again, I'm not exactly convinced that the euro is any safer than the US$. I know your usual piece of advice: buy tangible goods while money is still worth something. Unfortunately, this is quite impossible in my current situation: I live and work in a country that I am not a citizen of (and will most likely have to leave in a couple of years), plus I live in a 20 sq m studio (that's about 220 sq ft), so storing much of anything other than day-to-day necessities is a challenge. Oh, well. I suppose I can't discount the possibility that I'll be left holding the bag in the not to distant future...

(I'm having trouble with Blogger, so this might be a double post. If it is, please delete.)

Thank you JMG for yet another insightful post. I might be jumping the gun here in suggesting that there is already the potential of a religion to see us through the coming years. It already has many millions of followers worldwide it, the only toes it stands upon are those keen on perpetuating the myth of progress. It needs no priesthood or special buildings it is the worship and a privation of Nature in all it's diversity and wonder.

Interesting. Over here in my corner of the world (the UK) more and more people have shuffled off the lower end of the income scale and need food banks to feed them. Some, it is said, are even returning said food because they lack the means to heat it, and would prefer that someone else had it. Even the Red Cross is getting to work and will be standing in supermarkets soon urging shoppers to donate a portion of their food to help others survive - the first such effort since WW2.

Most of this is lost in the bubble talk of the media and politicians. House prices are at a record high, and people are buying new cars like there's no tomorrow (on credit, of course).

But wage rises are way below inflation and many are resorting to payday loans to make it to the end of the month. Millions are on so-called 'zero hours contracts' i.e. employed, but not doing any work so therefore on no pay. The divergence between the haves and have-nots grows daily.

Yesterday I met a man who is happy to lend me his shire horse to haul chestnut logs out of my woodland this winter. In return I'll give him some wood and additionally, his horse will get a bit of training in wood extraction which will benefit its owner.

This is a great relief to me because I recently found out how hard it is for two grown men (one of them me) to carry a six foot log the 100 yards or so up a muddy slope to the wood pile where it can processed into fence palings and gate posts. A horse can pull five such logs at a time without breaking a sweat. It gets a performance related bonus paid out in apples.

Another guy is helping me with the actual coppicing and charcoal making. In return my wife is restoring some of his furniture and re-upholstering it. Another woodland neighbour is helping out with the coppicing on the understanding I help him with his cider orchard that he's planting up.

I'm starting to get a feel for what a steady state economy might feel like.

John - I agree with your analysis. Some of us saw this slow debilitating disaster approaching and have made changes in life style to better prepare for the long haul. What is so confounding is that this unfolding "situation" is self evident (plainly with us for all to see, hear and feel) yet rarely is heard even a whisper of such reality. It's as if we are in a fantasy world. Trying to talk to relatives, friends, neighbors - even strangers on the street - gets blank stares and sneers. Our children, now middle aged adults, I am certain , think we (wife and I) are about ready for the looney bin. I can add nothing more than encouragement. Russ

In all this recent budgetary mess, a recurrent theme has been the growing cultural gulf between rural and urban America. Is this a common feature of a civilization's decline? And, if a civilization's decline provides fertile ground for new religious sensibilities, on which side of the urban/rural gulf do they generally first take root?

I do have a beef with the all-too-common problem of comparing a entity issuing its own (accepted) currency to a family (or individual) budget.

What is sustainable for only a few brief years by an individual can be sustained for far longer (as we have seen with the US and almost all other nations with their own currency) - deficits, or living above their means - have not prevented a large number of them from thriving (or at least have not landed them in bankruptcy).

That is not to say that running up a large deficit does not have consequences - but they do arrive as quickly as for our individual big spender.

Of course, some experts extrapolate from the current and preceding situation that "deficits never matter!." From what I can tell, Modern Monetary Theory adherents are one of the tribes of economists that are most liable to do this.

Regardless of theory, as long as T-bills remain the yardstick by which other investments are compared, as long as oil (energy) is bought and sold in US dollars and as long as the US can print US dollars, then the deficits of the US does not matter.

Instead of a happy-go-lucky individual "earning" 50,000 USD and spending 100,000, we have an entity that spends IOU:s that it prints itself. As long as its trading partners are OK with that, it does not matter how many it prints compared to how many it "really makes."

TL;DR: Deficits matter, but they matter mostly on the non-quantifiable qualities of "trust" and "fear" - and with the inertia of the existing system.

What remains a question is thus: when and how will the change from USD to whatever replaces it happen?

Thanks again. You ask "why has the US government backed itself into this mess?...it’s safe to assume that the people who have made these decisions are aware of these possibilities".

I often wonder about this. I don't see much evidence that members of the upper echelons of the US do reflect on the risks they are running (not that I actually know any of them). From my perch in life the wealthy political, professional and managerial classes driving the US locomotive seem to be doing pretty well right now. True, the caboose is on fire and will catch them eventually, but for now they think things are actually doing fine because they are doing well personally. Stock market is going through the roof, government seems able to type money into existence to keep it all funded, etc, etc. I'm guessing they think they can out run this for quite a while, with more accounting tricks and rule-changes of various sorts.

Agree about the return of religion, though. I spent much of the summer working on a farm to help take my food and herb growing skills to another level. Quite an experience. I was surrounded by bright young people, wwoofers and such, who see the economic reality of things pretty well and who are full of spiritual aspirations of various sorts. Their faith in something other than "the system" seemed as strong as my faith in the system was when I was their age 30 years ago. Lovely to see.

I see a lot of calls for socialism as a response to the crisis and have to shake my head. I had my little dalliance with it, but it quickly became apparent to me that by and large it is as corrupted by magical cornucopian thinking as Libertarianism. And when the underlying assumption of endless material and energy resources gets yanked out from under them by reality, larger-scale socialist states quickly default to gulags and mass graves for the glorious workers while the leaders get palaces. Having recently witnessed an exchange wherein the socialists all sagely and easily nodded at the "objective" necessity of the mass murders committed by Lenin and Trotsky (including the slaughter of children), I will be running as fast and far from any such experiment as I can.

I see the conspiracy theorists have arrived, so here's a more entertaining one:

It is sad that for all of the million real-world problems ahead of us(where you get so insightfully at in the second part of your essay), people seem to be focused on the one problem that isn't a problem: the budget deficit. The United States government has the monopoly of printing dollars. They can therefore never be forced to default (if somebody wants back what the government owns them, the Fed can print more dollars). Of course they can always choose to default but this is a choice, not a necessity. They don't need taxes in dollars to pay for expenditures. Rather taxes are what gives the currency value. In return for the government's dollars it gets real services in return (army, teachers, fire departments ...) We all need dollars as we all need to pay taxes in them, so we work to acquire them. However tempting the metaphor is, a government issuing its own currency is nothing like a a household. Does this mean that the government can print all they want and party like it is 1950? Of course not. Shortage of raw materials and energy and the resulting impossibility of continuous growth are real. The government could now spend more without causing inflation until the economy is at full employment IF there are enough of raw materials and energy. You are absolutely right that this is the real problem and I admire this blog's efforts to always uncover the root causes of predicaments.

Everybody's spending is somebody else's income. This means that as the government is in deficit, the private sector is in surplus (= savings of the private sector). Government surpluses mean private sector deficits. It is therefore no accident that the Clinton surpluses ended in a crisis, as it meant that debts were accumulating in the private sector. The government should be in debt to accommodate for the wish to have savings in the private sector. How large should the deficit be? Large enough so the economy to be near full employment, not more to avoid inflation.

Quantitative Easing in practice (as so far I understand it) is nothing more of transferring numbers on accounts inside the Fed. More specifically from savings accounts to checking accounts. Obviously this has had hardly any effect on the real economy. It is not printing money at a frantic pace.

European countries got into trouble as they put themselves onto something even more strict than a gold standard: the euro. So they indeed have to borrow to be able to spend and have to act like a household and can be forced into default.

There are many real financial problems: greater income inequality, loosening of oversight rules, ... but these won't be solved by being concentrated on the budget deficit.

Will current monetary system survive the upcoming Long Descent? Probably not, but that will be because of real shortages, not monetary shortages.

Historically have rationalist/secular institutions filled this role, possibly on a much smaller scale? My assumption would be that while many of the rationalist/secular bent would have the drive to try and preserve something of the intellectual/physical infrastructure of the declining civilization, I'd assume that where they fall down is an inability to maintain dedicated membership over the generations however. Are there such institutions which morphed into religions with the passage of time?

Also is it reasonable to expect that as the resource base of industrial society contracts, industrial society will increasingly respond by simply ejecting more and more people from it until it stabilises again? If so can we expect those exiled from industry to encounter the problem that while as a community they would be better if they developed artisan manufacturing, the industrial economy is still able to dump goods into the local market for far cheaper than the artisans are able to produce such goods for. My understanding is that this can be seen even today in the third world, and it leads to impoverished people who have to become raw material producers for the industrial nations. If so is it likely that future religions will have injunctions like you will not trade in goods made with/from or having anything to do with oil/gas/coal, in order to deal with the problem that while for individuals it seems like a good thing that they can buy goods cheaper, it pumps wealth out of the community? If so, again would a secular organization be able to accomplish similar results?

JMGI must have been reading too much JMG ;) I woke this morning from a dream of the decline of the USA: ‘the President’ explaining why New Mexico, I think it was, was pretty much on its own from now on: he could no longer make it down there. I might almost turn toward Jung for explanations – I was tempted by recent ‘Lament for the Dead’ by Sonu Shamdasani and the late James Hillman, but so far am saving my energies.

I am not American and I know little of N Mexico, but looked it up this morning. I presume that my ‘dream’ (sic) scenario would only happen if & when the Ochoa potash mining project does not work out (i.e. turns out too expensive as in your useful scenarios description) http://www.icpotash.com/ Failure of this potash project would have of course immense geopolitical significance. This description of potash in the modern world, 20thC and continuing, gives one a feel for the way Liebig Law of the Minimum works out: http://www.bloomberg.com/news/2013-08-07/a-century-of-international-potash-intrigue.html

Otherwise New Mexico might be a possible candidate for my dream. “The federal government is the largest employer in the state, accounting for over one quarter of New Mexico's jobs. … defense; Hi-Tec. There is limited irrigation. 46% of 2M growing population is Hispanic. Natural Gas production has been on the decline in New Mexico since 2000, from 1.6 tcf/year in 2000, to 1.2 tcf/year in 2011. ”

‘World economic growth’ continues just now after fantastic monetary stimulation: USA, China etc. I am not sure what the building-bubbles in China and their cement industry really amounts to. “Beijing reports that its electricity consumption in September [2013] rose by 10.4 percent year on year and between January and September consumption increased by 7.2 percent. Electricity consumption in China usually correlates well with the pace of economic growth.”

Guess older industrial world, Europe and European Diaspora has ‘stayed in balance', just about, meanwhile, on the back of China’s coal miners, and on ‘economies of scale’ keeping down unit costs (for examples; solar PV panels cost reduced by 90%, most reduction in the last 10 years, and containerisation on vast cargo carriers keeping down ocean transport unit costs. However, 7% per annum growth means doubling every 10 years anywhere it happens. To put it another way, it’s during the ‘final doubling’ when it gets seriously tricky! :(. The USA is not going to ‘double again’ and it scarcely seems credible that China will either?

So, it looks like we just got there then in terms of global ‘affordability’? I am still scratching my head about that potash project though, and time-scales for USA.bestPhil H

You offer a nice lucid explanation of why there is no good exit for our political leaders. I'll add one nuance to the analysis based on my research in Kazakhstan in the mid 1990's. Contraction and run away inflation meant that investment wasn't happening, even when it would have been productive in real terms. Money lost its ability to hold value and wages became worthless. On the other hand, every family was intensely active in making use of what resources they did have and translating them into all the other stuff they needed. If you had a house you took in someone who didn't, but who might have access to a truck or medical training. If you had access to a dacha garden you hooked up with someone who had the root cellar that you didn't have and so on. One of the reasons I prefer your long decline to more apocalyptic visions is because I have a tremendous respect for people's ability to leap into action and muddle through even in impossible, disorienting times.

thanks for the interesting read! When you talk about preserving cultural and technological heritages that are valuable I can only assume that these future institutions will not be singing Katy Perry songs and giving tours of holy objects including old iPods ;) Where on earth will religious groups that have actual value in these two areas spring from then?

Here in Asheville where we have like five craft breweries per resident and old Appalachian craftiness galore I can see where a lot of the value/technology would come from; there definitely has been a certain amount of wealth in the area that has kept these old operations afloat so that's certainly good...

I'm at the beginning of taking an accounting/bookkeeping certificate from a community college (and will be using the lower-interest student loans to pay off our higher-interest credit card bills) and found your statement about the Roman citizen accountants fleeing to work for the barbarians interesting. You definitely inspired me towards this goal as it's been mentioned on the blog many times as a valuable skill so thanks for that. Hope all is well, I'm off to grind some coffee beans to get me through the day :)

I think you are certainly right that religion - broadly defined - is going to help us understand and react to what comes next, and that our current religious repertoire is going to undergo some serious revision (pun intended). The other great resource that will inevitably figure into it is kinship. Kinship is the basic, universal means of organizing a social world - and it gets extended out into extended families, into the links of marriage and fostering that merge families, into the often mythologized stories of clans and tribes, into the management of wealth and power among nobilities, and eventually, in a diluted form, even structures more abstracted social organizations like the mythologies of nations and religious "brotherhoods".

Kinship as an organizing structure is thoroughly broken in our current society, so I'm very curious how kinship gets mobilized and reconstituted in the coming generations. I think that is as big a question as the religious and economic issues you are developing in this discourse here. I wonder if anyone is dealing with it at anything like the level of sophistication as you have going here?

Always stimulating ideas here. I am tempted to critique some of the highly oversimplified economic processes described, but then remember that the only way to see the big picture is to oversimplify a lot of details.

I think the focus at the end on possible means of organizing human effort and cooperation is the central issue. If the economy does indeed seize up in a low or no growth situation, then we might indeed fall back to the point where feudal and religious structures are the primary means of organizing humans. But your simplified picture that freezes up is pretty pure capitalism. If government intervention in the economy of similar scale as the current flailing to maintain growth were used to incentivize working together in a low growth economy, there are many ways it could work. Of course the problem is that 3 centuries of growth have led so many people to expect it to continue forever that it will take some bigger shocks than we have seen yet to produce a large enough consensus to work together in an economy with growth rates fluctuating around zero.

Another thing that baffles me, is the relative quietness from the media when it comes to Asian investments on the West Coast and Canada. It seems that Canada is ready to partner up with China and "leave" the US behind, while China slowly takes over land and services in the US.

I live in the Dallas/Fort Worth Metroplex and a big chunk of our public highways systems are being turned into Toll highways owned and maintained by foreign companies. The one's around here have been mainly taken over by Chinese companies.

It's almost as if the local governments are selling off their own folk to the wolves.

Want to drive? you got to pay. Did I mention that my area has a HORRIBLE public transit system? If you don't own a car, good luck finding a job.

PhysicsDoc, one of the problems that has to be faced in any discussion of religion is the tendency, pervasive in the Western world to see everything through the filter of Christianity -- or, more precisely, through a version of Christian history filtered through a rationalist polemic. I'd encourage you to do some reading in the history of other religions that filled the same role I'm discussing here -- Japanese Buddhism and ancient Egyptian religion, which I cited, will do for starters. You may be surprised to find that persecution is not a universal feature of religion as such -- just of certain religions.

Steve, thanks for the reminder! A book well worth reading.

Isis, in your place I'd use that money to pay for classes in one or more useful skills. That's an investment that will fit in even a very small studio, and can be transported readily across national boundaries!

Think Again, thank you for a spirited and courteous reply! I'm quite familiar, though, with the claims you're making; you're hardly the first person to make them here, you know. Of course there are people looting the system in various ways -- I've discussed the culture of executive kleptocracy that's punching holes straight through the foundations of our economy more than once -- but there are also real crises building, and blaming those crises on political and financial elites has become a common way for people to try to evade the hard reality of our predicament. The pervasive detachment from realities that so often afflicts ruling classes in their final years is also a massive factor -- I'd encourage you to read John Kenneth Galbraith's The Culture of Contentment, which makes an edgy and well-documented comparison between the American elites Galbraith knew well and the French aristocracy on the eve of the Revolution. More generally, you might want to reflect on why it's so comforting to find someone to blame for our rising spiral of crisis, and whether that pursuit actually motivates constructive action -- or not.

PCMcGee, thank you.

Steve, maybe so, but until it gets a priesthood (or priestesshood!), special buildings, and the other institutional forms of religion, there are going to be sharp limits on what it can accomplish. More on this shortly.

Jason, over here we don't have zero hours contracts, but a huge number of full time employees are being reassigned to part time hours so their employers don't have to pay for Obamacare, and the number of permanently unemployed with no benefits keeps on rising. It's going to be a bitter winter.

Russ, I'm very familiar with that! All we can do is keep on doing the right thing, and hope that the people we care about get a clue eventually.

Chris, it depends. More often than not, it's actually a divide between a handful of very big urban areas and the rest of the civilization -- there are plenty of cities in the US that don't correspond to "urban America" in the sense the media has in mind, so we're not unusual there. The Second Religiosity, though, takes root where there's an opening, and a lot depends on whether the culture's traditional religious forms or new religious movements provide the basic framework.

Unknown, oh, granted -- it's simply a metaphor to make a point that a lot of people want to dodge these days.

Yupped, you may be right -- in which case things may get very messy indeed. There seems to be a rough correlation, historically speaking, between the cluelessness of an elite class in its last years and the fraction of the same class that ends up guillotined, torn apart by screaming mobs, etc. in the denouement.

The gov't can print any number of dollars. And with these dollars meet any demand by foreign and domestic creditors. The only way this country can default is if Congress decides to make the country default. The gov't is not at all like a person, who cannot print themselves out of any debt. There is another dynamic at play here. Perhaps the credibility of the dollar; I don't know, but certainly not the ability of the Gov't to print it's way out of debt. This is different from Europe where countries like Greece which use to be able to print their way out of trouble, are confined to the Euro, and therefore at the mercy of their Central Bank. I suspect that the US is also at the mercy of its Central Bank.

The first was that there has been nothing enjoyable about the government shutdown. That might sound kind of absurd this late in the game, but I think there's still a part of my mind that thinks "collapse" and goes off to science fiction adventures in a post-apocalyptic wasteland. In real life, it just means unpleasant things happening at greater frequency.

I also note that while the government was "shut down," military strikes were conducted in at least three different countries (Aghanistan, Somalia, Libya.) That would seem to argue very strongly against any lingering hope that the US might manage the collapse by unwinding the empire, bringing the troops home, and finally enjoying some hint of the "peace dividend" that we didn't get in 1990. Nope, first on the chopping block are the national parks, food safety inspectors, and NASA.

The other thing that struck me was your mention of the Roman laws forcing business people-- in other words, middle class people-- into their fathers' profession... and how many of them fled the empire to barbarian kingdoms. This shows us something else that empires do when their economies start to unwind: They force people to keep participating, whether they want to or not. I think these laws have a precise parallel in the laws which make it impossible to discharge student loans through bankruptcy and of course the new law which forces us all to buy health insurance. (The latter also establishes a precedent whereby we can be forced into any other tanking market. Maybe the next democratic president will solve the housing problem by forcing every adult American to purchase a mortgage).

I know a number of Americans in their 20s and 30s who have moved to Asia and left their student loan payments behind.

BTW, all 'growth' is yearly increase in unsecured debt. All industrial/centralized enterprises are loss-making and have been from the beginning, they be continually subsidized with loans ... which can only be repaid with more and more loans.

Want to know why the US is saddled with hundreds of trillions of dollars of debt? Look @ the end of your driveway.

Liquid, I heard about that! Yep, it's those evil Freemasons, who are no doubt diverting billions of dollars from the Federal budget to fund free clinics for children. Oh, wait... ;-)

As for socialism, though, too true. I may just have to reread and link to that essay by George Bernard Shaw in which he talks at length about why exterminating millions of useless people isn't a moral problem, since it's for the greater good and all that.

Kristofv, money is a system of tokens we use for distributing real wealth; its movements and vicissitudes are therefore useful for tracking what's happening in the world of real wealth. When a major power has to pay its bills by printing money, that's a symptom that something has gone massively wrong in the creation and distribution of real wealth. You're right that it's not, in and of itself, something that matters, but it's a convenient signal for troubles that are otherwise more difficult to track.

Dagnarus, it's been tried a few times, and it doesn't work, because secular institutions by and large can only draw on the incentives available to the rational mind, and in times of crisis, those don't cut it. Most human motivation is nonrational, and nonrational motivations are also far more powerful than the rational kind; you'll see very few people cheerfully sacrifice their lives for some rationally thought out reason, while people do so all the time out of love, loyalty, and religious faith -- and that's the level of commitment that it generally takes to have an impact on a collapsing society.

As for your second point, that's the mechanism by which what Toynbee calls the internal proletariat gets formed. Those are the people who are in a civilization but not of it, who pay the costs but get few of the benefits, and who respond by withdrawing their loyalty. It's when they find an alternative banner around which to rally that the civilization generally comes crashing down.

Phil H., fascinating. The potash thing is worth watching -- and another good incentive to get a composting toilet in place and learn organic methods of growing food!

Andy, that's common practice in hard times all over the world, and yes, it's also one of the reasons I dismiss fast-crash hypotheses as the warmed-over apocalyptic fantasies that they are.

Jess, excellent! As circumstances permit, see if you can find some old accounting textbooks from the pre-computer days, so that you can learn how to do all the same things on paper, by hand; that way, when computers start pricing themselves out of the market for small businesses and the like, you'll have a profitable career teaching double-entry bookkeeping to those who need to learn it in a hurry.

Andy, it's common for kinship structures to be shattered in late civilizations, and to reconstitute themselves slowly and painfully in the dark ages that follow. I don't know of anyone who's discussed that in detail, but there may be something out there in recent historical writing I haven't seen yet.

Ganv, exactly -- a weekly blog can only go into so much detail. The problem with trying to stabilize things in a no-growth economy, as I see it, is that before we get there we're going to have to see a lot of contraction -- a negative-growth economy in which most people are going to draw the short straws. That's not a recipe for cooperation and consensus.

Nano, many thanks for the link -- a useful dose of sanity. As for selling off the country to the Chinese, why, yes -- that's the order of the day, motivated by clueless local elites who haven't grasped the fact that the US has no lock on global power and that other nations are playing for keeps.

Ben, sure, the government can print all the dollars it wants -- until its foreign creditors stop accepting debased dollars in payment for goods and services, and hyperinflation cuts in, erasing the value of all dollar-denominated instruments. Default is usually a lot less messy.

Steve from VA, what's at the end of my driveway is the first round of autumn leaves, which I'll be raking up shortly to dig into the garden soil. It gets used by a car maybe once a month, and then usually by one of our elderly neighbor's sons. I promise you those leaves aren't adding to the federal deficit... ;-)

I would take issue with the popular meme that a "huge" number of full-time positions are being knocked down to part-time in order to avoid the ACA. While I have many and significant problems with the ACA, that fear appears to be unfounded.

Excellent posts as always. Throughout the past weeks of reading news articles on the prospect of the United States defaulting on it's national debt, I found it interesting that almost none of them mention the fact that a default allows a country to recover from a debt crisis. Without a default (or hyperinflation) in the next few decades, I can see the United States slowly, but surly transform into a third-world nation. As the government decides to cut it's national programs so it can continue to borrow money, I assume that it will be a matter of time before taxes are spent on paying interest on debt rather than essential government programs. For the media to not mention this, shows the cluelessness of the elites.

excellent essay JMGI can't add my insights to wonderful comments...but i can just inform commenters about the religious resurgence and failing economy in Pakistan with generous help of saudi arab money.Read this:Pakistan Railways: Electrical locomotives wrapped up:LAHORE: After Pakistan Railways (PR) stopped using its electric locomotives for passenger trains September last, and using only a few for freight operations, it has now decided to abolish the electric locomotion entirelyhttp://tribune.com.pk/story/124828/pakistan-railways-electrical-locomotives-wrapped-up/

After Decades of Neglect, Pakistan Rusts in Its Tracks:http://www.nytimes.com/2013/05/19/world/asia/pakistans-railroads-sum-up-nations-woes.html?_r=0

My quibble is your statement "Yes, I’m aware of the theorists who argue that it’s all a part of some nefarious plan.... It’s safe to assume that the people who have made these decisions are aware of these possibilities."

It's a quibble because it doesn't materially matter if this is a global conspiracy by the disguised lizard-creatures of the underworld, or if it is the result of a clueless bag of lemmings lurching randomly toward the cliff's edge: I get that. However, I think you're wrong at both ends of the spectrum.

First, I don't think it's safe to assume that the decision-makers are aware of any of these possibilities. There's plenty of evidence that people construct filter-bubbles for their perceptions, and simply don't see the truck barreling down the road directly at them. This recent government shutdown is a case-in-point: exactly what did the Tea Party get out of this, other than a damaged brand? Humiliating failure was the best of the predictable consequences. It's hard for me to credit this shutdown to people who are aware. I certainly don't think the possibility of hanging from a lamppost is anywhere on their map.

Second, there are at least two distinct poles for conspiracies.

One is the sort of conspiracy that must be planned and executed in secret, and if exposed, is easily shut down. The conspiracy to assassinate Giuliano di Medici in 1478 is a classic example, complete with the conspirators meeting at night in the labyrinthine bowels of a castle. The great task for the "good guys" is to discover the conspiracy and make the proof public. After that, everything magically takes care of itself.

The other is the sort of conspiracy that takes place in plain sight, according to an open plan that is (or becomes) a "virtuous" ideology. Any guerrilla or resistance movement is an example, as are military coups and "power plays" by people like Lenin.

The United States is positively rotten with conspiracies of this second kind.

The Tea Party is one of these open conspiracies. It's an open secret that the Tea Party wants a Federal Government shrunk to a size that can be "drowned in a bathtub" -- i.e., they want the federal government destroyed. Many of its members are closet anarchists who, despite mocking the Kumbaya attitudes of the sentimental Left, seem to think that people can get along just fine without any sort of government at all: the "magic of the marketplace" will, once freed of "government interference," bring about a "mercantile paradise" where everyone (but the lazy) become rich.

A certain subset of the wealthy forms a variant of this. Many of them believe that a) wealth is created by virtuous hard work, b) their own wealth is evidence of their own virtue and hard work, and c) whatever worked for them will work for anyone/everyone. Therefore, anything that stands in their way stands in everyone's way. Taxes, for instance. Environmental laws. Minimum wage and health insurance. Eliminating these obstacles is good for everyone. What's good for GM is good for America.

These are among the thoughtful wealthy. There's also the unthinking sort that doesn't aim so high, they just want the money. The unthinking sort will most certainly suck a pension-fund dry if they think they can get away with it, and if they can do it without risk of prosecution, so much the better: indeed, if there's a legal loophole, you can bet that there's a whole crowd of people -- an open conspiracy of people -- clustered around it.

Cluelessness and conspiracies abound. They just don't make any real difference.

In a steady-state economy investment is a zero-sum game... In a contracting economy... investment is a negative-sum game, the average investment loses money...

Fortunately, humans are social being that have short memories and are more concerned about their relative place in the economic order than in absolute terms. These human traits point the way forward. Improve fairness and we will happily accept that there is less to go around. Increase our salaries every year and we feel better even if the money buys less. Used together, reduced inequality and general inflation, it could be possible to gracefully find a way out of the mess we are in. Until we can reclaim our democracy, such policies are not likely to come from Washington.

Just to add on to the Potash mini-theme, when I took my Permaculture Design Course, there was an older (60ish) farmer who had farmed all his life in the class. He was a true sage and knew nearly everything about farming. At some point when the discussion of Peak Oil came up, he stood up and started talking about Potash/Potassium. He felt strongly that Peak Potassium was going to get us before Peak Oil did. He stated that it was getting harder and harder to find (in terms of sufficiently large mine-able deposits) and it was taking more and more energy to get (familiar themes, no?) and it is an essential mineral for growing food plants and also for our bodies. He also talked about the lack of minerals in the soil and how depleted the soils have become of other essential minerals our bodies need. In case anyone wants to read more, here is a pretty good summary of both these issues: http://therearenosunglasses.wordpress.com/2011/01/12/peak-potassium-the-next-resource-war/ (note: I don't know much about this blog, all I can say is this article does a good job on this issue)

I am a relatively new reader who is enjoying catching up on old(er) posts as well. One question, JMG, - not sure if this is the appropriate place or not, but I wanted to get a few books of yours to read and looked them up on Amazon, but ended up getting overwhelmed at the number of them....you are a very prolific writer! Any recommendations on where to start (from you or other readers of this blog)? Largely looking for general philosophy & expansion of ideas of this blog.

" the sum of workers' wages is necessarily less than total sales, since that has to pay for both their wages and capitalists' rent on their income. Capitalists do not tend to rededicating 100% of their income back into purchases… so who's buying it all? (The answer of course, is that the public has to go deeper into debt every year to balance the equation.)"

I'd like to understand this better. I don't see why this couldn't be a steady state situation. Why must the public go deeper into debt year by year?

JMG, you're right to never attribute to conspiracy what can be adequately explained by stupidity.

In my long career in business I've seen absurdities that you would not believe from leaders held in such high esteem in that world, that were paid such vast sums to get things right, yet taking courses of action so obviously and preposterously counterproductve, so destructive to the businesses they ran and to their own personal interests. And there were other highly paid people around them blindly following along, in full cheer-leader mode, apparently having switched off their critical faculties, so willfully blind to absurdity, so willfully in denial of facts and common sense.

I learned the hard way that when people are in these "reality distortion fields" (to borrow a term used in connection to Apple) it is pointless to talk sense to them. They don't listen.

Seems that people would rather crash a company and wreck careers and reputations than re-examine ways of thinking and doing. I don't know why this is, maybe it's a conservatism (I really didn't want to say laziness) that's inherent in the human character. People would rather follow than think. They'd rather walk along established pathways. This, they say, is the way we've always done it, dammit, and it's always worked. And that's it, full stop, end of discussion. And so the doubter walks off with his tail between his legs, muttering to himself, well, yeah, maybe it worked before but times change.

It's not just people in one industry (ie real estate) that live in denial. I've worked in two very different sectors of the economy (my skills were easily transportable) and I saw similar habits of mind.

There's nothing that the Fed is doing that anyone with a high-school education can't see as being utterly divorced from reality. But such is the power of group-think (and I've seen it up close), so deep is the intellectual rut, that the people running the Fed are blind to any other way but theirs no matter how laughable.

Other people, not having been part of Fed official-dom's long academic tradition, not having invested so heavily in it, not having been steeped for decades in its particular ways of thinking (and maybe not having been awarded Ivy League degrees), see it otherwise. But these others are not employed by the Fed.

I would concur to some degree with those other commenters who've pointed out, the limits to growth, the finitude of resources, ought to be pretty obvious, particularly to those who by wealth and connections have more information than the average voter. Further, a conspiracy of deception by the plutocrats and oligarchs has some telling supporting evidence: for example, not long after the long Cold War against Communism's violent attempt to retrain people to share with each other ended in the early '90's, we entered into a new ideological/religious war, against Islamo-terrorism - a war without boundaries, against no state, but against anyone who would use force to oppose the American/West empire. Samuel Huntington predicted (prescribed?) this in his work The Clash of Civilizations, which was released shortly after the end of the Cold War. It also bears acknowledging the neo-conservative heritage, particularly rooted in Strauss' suggestions that a population, particularly one so diverse as the American, in order to be united, must have a common enemy. What better common enemy than Communism? or after that is gone, Islamo-terrorism? And to conclude, there are enough reasons to suspect that the official accounts of events of 9/11 ought to be seriously questioned, that one should pause with the suggestion that those in power are bumbling along like everyone else. Air defense systems failed for 90 minutes while four planes strayed off course, even though in the prior year 57 such stray passenger planes were intercepted within minutes of leaving course by Air Force fighers. The buildings came down at free-fall, although designed to withstand airplane impact; and steel melts at higher temperatures than jet fuel burns. One building, not impacted by planes, came down of its own, likewise at free-fall, like a controlled demolition. There are many engineers and architects who continue to reject the official account of events of that day, a day that ushered in a war that can never be won, an event that counts as the first strike on American soil since 1812, and a first strike of fear into the comfortable American psyche, and an event that continues to justify our "defense" of "freedom" for Americans, by widespread military presence in countries and among people that have nothing near the capacity to harm us - but that do have those cherished treasures underground.

JMG, as you have observed, we've experienced the greatest economic boom in recorded human history. One result is the greatest capacity for violence, and the greatest level of intellectual sophistication, in human history, and it is largely driven by America. It must be pointed out that while there are historical parallels, history is not a sure guide either, and every moment is unique. What is unique now, are the capacity for violence, which is a government monopoly, and the capacity for propaganda, a well-studied and well-utilized art.

to carry the narrative a bit further (and I concede, it is nothing more than a narrative, not reality, but narratives are the field in which the mind of language plays): the Presidents are figureheads of our nation. We followed a philandering, dallier in Clinton, who managed "economic growth" well (as fictitiously two-dimensional as that might have been), but led us into moral decay (right? this is a common narrative); with a bumbling cowboy who could do little else but sign where the generals and CEO's told him to - perhaps the worst President in US history; with a black man with a Muslim name - a peace offering to the global South, and a target for loathing by all who find American exceptionalism to be their own sub-religion.

The cultural, economic divides in America are a recipe for mass conflict. they show no signs of being healed. While it is hard to imagine orchestrating this, it's hard to imagine it happening by chance either. Again, the way to unite people is to give them a common enemy. I see the elites manufacturing conflict in this country in order to control people, on both the red and blue sides, making our neighbors into our enemies along ideological grounds.

In my forty-four years of active teaching at one of the Ivy-League universities, I have happened to rub shoulders with a number of the wealthiest 1% of the nation. They are, on the whole, not the most intelligent or far-sighted people in the room. They can easily combine, just like other people, to further their common interests in the short term. But *effective* long-range planning seems to come no easier to them than it does to other people. If they were to attempt a long-term conspiracy, it would soon become a failed conspiracy.

However (in contrast to the rest of the room), they are by far the most energetic, the shrewdest and the most ruthless people I have met at my university. This is what they rely on to sustain their wealth and power, not on some conspiracy.

They are affable people, easy to talk with and easy to get along with, but in an instant they become very dangerous people, once you have *seriously* threatened any of the things they value most. They will not waste the force of a trip-hammer to crush a fly, but they will remove any such threat to their wealth and power in the most effective and least costly way possible. And they understand very well the role of trust and reputation in maintaining their wealth and power, so threats to those things are dealt with as ruthlessly as material threats.

Also, a certain fraction of them truly believe that they, or at least their university, stand entirely above the law. Over the years, two of my university's trustees informed me, each independently of the other, that my university, having been founded under a charter from the Crown of England, has never been and is not now subject to the authority of either the Federal or the State government.

Of course, this is madness. And mad people do not make effective long-term conspirators.

I also second Thijs' recommendation to read "Debt: the First 5,000 Years" by David Graeber. Its whole basis is the sort of broad morphological comparison of historical societies which you (JMG) seem to specialize in. Also at the end of the book he draws a remarkably similar conclusion to your theme this week: he claims that, across history, the 'progression' from barter and debts of honor (actually it goes the other way, according to him) into hard currency such as coins and metals, and then paper currency, is not a linear progression as economists try to teach us these days. It is a cycle which seems to reliably reverse direction and go the other way periodically. He claims the shift from hard currency and strictly quantified numerical debts, to and from a more qualitative attitude where numbers do not dictate decisions and honor and trust is more important, seems to parallel similar religious and philosophical shifts in a society. He notes we seem to be on the verge of such a shift right now, but he can make no claim about whether the specificity of money drives a flight to or from transcendence in religion, or vice versa, or if some third causal factor governs both.

"Debt" is available as a _free_ audiobook here: Unwelcome Guests, a podcast that is well worth listening to, often dealing with collapse issues.

Accompanied by Mephistopheles, Faust attends the court of a ruler whose empire is facing financial ruin because of profligate government spending. Rather than urging the emperor to be more fiscally responsible, Mephistopheles—disguised, revealingly, as a court jester—suggests a different approach, one with disturbing parallels to our own age.

Noting that the empire’s currency is gold, Mephistopheles maintains there is surely plenty of undiscovered gold underneath the earth belonging to the emperor. Thus, he argues, the emperor can issue promissory notes for the value of this yet-to-be-found gold, thereby generating fresh monetary resources for the government and solving its debt problems.

Not surprisingly, the emperor and his treasurer are delighted with this idea. It means the monarch can avoid making hard economic choices while simultaneously providing the empire with desperately needed currency. Mephistopheles subsequently deluges the court with paper money, and Faust is praised by emperor and commoner alike.

The results, however, are not what are expected. First, the issuance of paper money does not solve the emperor’s spending problems. Instead the ruler and his court become even more extravagant, knowing they can always print more paper money to cover their ever-growing expenses. Second, the devil has subtly but fundamentally changed the basis of the empire’s currency. Instead of being rooted in the solidity offered by a tangible and valued asset, the currency is now based on flimsy paper promises. Thus long-term monetary stability and powerful restraints on extravagant government spending are sacrificed for short-term gain.

To those who say that the ability to print money renders national debt as unimportant:

The size of the money supply needs to match the size of the real economy, if the currency is to maintain value. If the economy expands with no new money, we see deflation as the it takes less money to but the same amount of stuff. Growth based economies are set up so that this is a bad thing and almost never happens. If the currency supply expands with no concurrent expansion in the real economy, we see inflation, as it takes more money to buy the same amount of stuff.

Expanding the money supply to avoid a debt crisis works in terms of preventing default but should lead to inflation as the economy is not actually growing. If this happens, it amounts to a tax increase, as the government gets the same amount of real value (albeit in more dollars) while everyone else sees their dollars worth less than before.

If the real economy is stable, the money supply is expanding, and inflation is not being observed, that means that something, somewhere is being assigned a value far above its real-world worth. A speculative bubble, in other words, that is guaranteed to pop. That appears to be where we are at right now, though exactly what is being overvalued (the US dollar in exchange markets?) is not clear to me.

Come to think of it, my recollection that Graeber found a parallel between spiritual change versus currency change may have come from this interview he did about the book, I think he said it solidified in his mind after the book was published. But the book definitely notes that the progression goes in a cycle instead of a straight line. Check out this interview in the second half of this podcast, it's a good place to start. The BBC podcast "Thinking Allowed" doesn't have individual pages for episodes, you can Google the BBC to find the podcast page, or right-click this direct link to the audio episode: http://downloads.bbc.co.uk/podcasts/radio4/ta/ta_20120111-1730b.mp3

As a socialist I'm used to having the Gulag thrown at me. There are several points I'd like to make.

First no question Lenin was a cruel utopian ideologue with very little regard for human suffering and some of Trotsky's activities during the Russian Civil war would be classed as war crimes by modern standards. Some people on the far left like to blame all the Soviet horrors on Stalin but the reality is that Lenin and Trotsky created the instruments of tyranny for Stalin to pick up and some of the more destructive Stalinist policies such as forced collectivisation of the peasantry were first advocated by Trotsky.

That said civil wars tend to be particularly vicious as events in Syria demonstrate.

But condemning socialism in its entirety because of that is no more reasonable than damning the whole Christian religion because of the Inquisition or modern Druidry for the actions of the ancient Druids for that matter. As for Shaw there was plenty of authoritarianism and contempt for the "inferior" masses among British intellectuals at the time but they weren't all socialists by any means. There's a book The Intellectuals and the Masses by Peter Carey that goes into this.

I would argue that Soviet communism was a socialist heresy. Lenin never gave all power to the soviets, the elected councils and cooperatives of the working class. He gave all power to his Party state. Socialism was originally intended to give control of the means of production to labour not necessarily the state. So the problem is not so much socialism, or even Marxism, but Leninism. There were several other socialist parties in Russia in 1917 before the Bolsheviks crushed them.

One of the lessons of the tragic twentieth century is that socialism needs to be based on democracy and the rule of law. Provided you have free speech, free elections and independent courts there is no reason why socialism should lead to tyranny any more than conservatism.

The Indian Nobel Prize winning economist Amyarta Sen has calculated that the lack of an effective welfare state in India may have led to a hundred million avoidable deaths since independence. That's a similar figure to all those deaths ascribed to communism throughout the entire twentieth century. And that's just India.

How many poor Americans have died over the last fifty years because US capitalism is more concerned about the profits of the insurance companies than the lives of the poor? Quite a few.

Rather than the nonsense of Obamacare it might be worth copying Britain's NHS. Rather than get government out of healthcare get the insurance companies out of healthcare. If a poverty stricken Third World country like Cuba can run a healthcare system that gives Cubans the same life expectancy as First World America it might be worth considering some socialism.

It's possible that if socialism does come back it will be in a very different form than in the twentieth century. My guess is that if it does it is more likely to look like Distributism than the Soviet Union.

"I expect that we'll hear quite a bit of that once the revival of American Marxism gets under way."

I doubt it. Some intellectuals might pick it up again but its ability to gain much traction is rather doubtful.For a start marxists already got to test their theories in real life and the results have been embarassingly unpalatable. Now in principle that might not be a showstopper, people usually aren't history buffs, but the people with power and money will make sure that in this particular case people don't forget. Then the marxist remnants,scattered and out of touch of the general population, face a monumental tasks when it comes to rebuilding a mass movement. Should they somehow pull that off they still face the problem that if they become an actual threat to the system they will neutralized, by being put to the wall and shot if everything else fails.

Their lack of answer to the issue of resource shortage may not be cripplig, but it might prevent some of the more aware people from joining that bandwagon.

I'm consistently baffled how anyone could think that the United States will be able to pay back $16 trillion -- that's $16,000,000,000,000 -- in debt. Obviously we won't ever be able to -- as you say, we're going to keep piling on the shell game of printing more money and so on -- but the fact that anyone can even pretend with a straight face that this could end any way but terribly badly is doublethinking in the Orwellian sense.

If the Republicans weren't godawful hypocrites who want to regulate certain personal freedoms (of the bedroom variety), I'd at least give them minor credit for bringing the absurdity of trillions in debt to public attention, but they are wallowing in their own multitude of absurdities, so forget it. I used to be a staunch Democrat, but I'm going to vote for some random down-ballot, no-party person for Congress in 2014. And that is not anything I would have done in the past.

Didn't mean for this to become a political cliché/rant. I mostly want to say that I think you're approaching this in a very interesting, rational way, and it's hard to dispute your POV.

Well, the only lesson a person that knows about how empires collapse can take on the US gov "shutdown" was to see exactly what was closed to the public ( even if keeping it closed actually meant more expense than normal operation ) and the ones that the US Gov made a point to keep working and publicize about it with great fanfare ... in other words, the US Gov is far more willing to spend money in Nazguls preying for potentially troubling Hobbits in far away lands than in national parks and memorials to the fallen. As a heavily based in the early Roman Principate governement form, we shouldn't really expect anything else than this ( that is, a increasingly military-centered economy ), and your quib about the mandatory hereditary professions in late Rome only adds to that ( well, you left out the worst example, the decurions: from strictly voluntary prestige function ( that is, it was not even a job ) to enforced under death penalty and confiscation of personal fortune if the tax Rome thinked you had to deliver didn't came out of the backs of the populace ... ) .

Anyway, on the meat of the post: it is quite clear to me that pretty much everywhere ( except on the relative winners of the current situation ) everyone is expecting that the other's economies recover to jump start their own ones :/ and that pretty much explains why the global economy is how it is: waiting for a recovery that depends on their recovery to come :p And given how a good lot of the economies in the "western" world is cutting left and right just to try to balance out minimally the budget ( like my own government, that has been piling " extraordinary solidariety contributions" and tax increases for the last half decade just to spend 105 when they collect 100 :/ ), any recovery of the type they crave is clearly out of the scope of atleast one generation or two ... and that is the optimistic view ( I'm actually quoting my own governement that does not expect to recover from this crisis fully until 2028 even in the best case scenario of a "deus ex machina" world economy recovery ... OFC they don't tell this in public, but it is clearly stated in their deals with the IMF )

On the religion in times of decline, in spite of you have not yet spoken clearly on the subject, I hope you don't skim out the possiblity that the state simply single out what they perceive to be the "wave of the future", target a group in it that is pliable enough to work with the regime and mesh the two groups ( a "sensible" dose of non-compliant with the regime suported ideology persecution probably needs to be applied though ) in a "sacred governement" entity. Rome did it for a quick example ( hence the canonical term for that being Cesaropapism :D ) and , if you count with the Bizantine experience as a continuity from Rome, it held for 3 times the duration of our "Industrial Revolution" , but it comes from far earlier ( atleast from the aftermath of the Alexander adventure, with a lot of his sucessors claming to be "soter" like the Gods ... ). I know that you are aware of that possiblity ( the governement in "Star's Reach" has clear shades of that, in spite of not being a full example ), but in this series of posts you have been hinting to be working in top of the internal proletariate theory of a certain very famous denier of the perpetual ascension doctrine, that, in spite of useful , does not explain all of the cases very well :/

Just to end, a very delayed response to earlier posts( but it only came to my mind this week ), there is a good historical reason for the current cornucopian theories having so much of Joachimite flavour: the event that jump started the current "western" culture, the Portuguese and Spanish discoveries, were partly made to fulfill a interpretation of the Joachimite vision of history as something divided between 3 ages, being the last one of the Holy Ghost.

The Portuguese elite ( and not only, given the number of celebrations of the crowning of the Holy Ghost as the emperor of the world that were established in Portugal in those times, some of them keeping up until today ) in the times of the discoveries was heavily influenced by Joachimite flavored ideas, being one of them that all the cristians needed to be united in one church before the third age would come( and after united, they would defeat all the infidels and start the 1000 years Age of the Holy Ghost ( that they believed to be the 1000 years rule of Christ on this world that the book of Revelations talks about in the last chapters )), including the elusive Pester John and the cristians of the far East ( remember that Marco Polo had stated to had encountered churches in there ).

But to unite them you needed to talk to them, a thing that was not easy under the Islamic control of the Middle east ... so you needed to go around that roadblock. In fact, finding the pester John was one of the five official reasons to maintain the naval discoveries "project", in the middle of more mundane considerations like profit and making war to the "Moors" and the official reason for the da Gama voyage as stated when he finally got to India was " to find christians and spices". With a start like this one, it is not exactly weird that the Joachimite vision of a triumphant ascension of the mankind to Heaven is heavily stuck to the core of the "western" values ...

JMG -- You've commented repeatedly that you expect a resurgence of marxism in the U.S. in the relatively near future. Are you basing this on actual trends you have noticed in American society? I see almost no trace of marxist values (even completely detached from that name) among the citizenry. The younger generations who would need to become outraged at the corporations enriching themselves at the expense of the citizens are instead spending their lives connected to the corporate crack teat via their mind-melting electronic devices. Those I have known who actually espoused marxism explicitly are now all gray-haired or dead.

Granted there is plenty of potential fuel for an anti-capitalist movement in the Christian Bible, but no one seems to be noticing that either, at least in America.

@ Yamano "I can see the United States slowly, but _surly_ transform into a third-world nation" Best typo.

I recently ran across an article proclaiming that new oil discoveries in Australia would exceed Saudi production. Before this blog I might have bought it. But two items jumped out at me. One was the word "unconventional." Aha, not nice pump-able oil, but shale or tar sand or something of the sort. The other is that the deposit is in an area with no water. And what do we know about unconventional oil--needs lots of water to extract. Doesn't sound like a good investment prospect to me.

Of course, there are many among the elites who are wise to what is going on economically and will ruthlessly protect their own interests. However, this doesn't mean an elite conspiracy is the only possible outcome, it may well be that different sections of the elite are driven into competition with each other for a share of a shrinking pie.

The US defaulted twice in the last century. In 1933 and 1971 it defaulted on its obligations to pay gold. Currently all US obligations are only for currency, not gold. The US can and will always pay all obligations in currency, because it can print it up at will. Whether that currency has value is another matter, but you cannot force the printer to default, ever. The printer prints.

The countries such as Argentina, Russia, etc. that defaulted all had obligations which they could not print away, either in foreign currency (dollars) or gold. No country which can print its obligations has ever defaulted or will. Instead, they hyperinflate their debts away while paying them off nominally, in full. This is what the US will do.

The European countries you cite currently belong to the Euro; therefore their national governments cannot print their problems away. They gave up that right when they gave up their individual currencies, but don't worry, their current problems will be resolved. They joined the euro for a reason, and that reason will become evident after the dollar hyperinflates. No, they aren't stupid. Did you notice that Estonia just joined? There are good reasons.

The ECB, and the US, have lots of gold, and gold will play a major role in the next reserve system, for reasons I won't go into here. No, we aren't talking about a gold standard; we are talking about freegold.

The US is well aware of the endgame, and is only seeking to drag out the end of the dollar reserve currency role for as long as it is useful. At some point soon either foreign governments, or the US will terminate that arrangement. Yes, the US can and will hyperinflate the dollar if that becomes more beneficial to their position. Remember, they have a lot of gold and a plan.

After that the US will have to live within its' means, shipping real goods to trade partners instead of shipping dollars in a perpetual trade deficit to nations which cannot spend them and must simply stack them as Treasuries.

My take is that conservative rhetoric has made socialism (though not necessarily Marxism specifically) potentially a ticking time-bomb waiting to go off.

One reason is the one JMG has mentioned multiple times: the Republicans keep calling anything and everything they don't like (including quite a number of things the public likes very much) "socialism." That sort of sloppy rhetoric has a good chance of eventually creating a backlash in which a large number of people who would never consider socialism embrace it just to spite the Republicans.

The second reason has to do with how much the Right's rhetoric actually has in common with socialism. Both have a distributive conception of economic justice and an aversion to free-riders, it's just that, to use Utah Phillips' terms, socialists are more concerned about "the bum on the plush" — the bosses who collect rent on the use of capital — while the Right is more concerned about "the bum on the rails" — the poor who live off welfare and theft.

It was an I.W.W. leader, Big Bill Haywood, who once said, "For every dollar the boss has and didn’t work for, one of us worked for a dollar and didn’t get it." Replace "the boss" with "a welfare queen" and you get the conservatism I grew up with.

Another factor is the potential influence of libertarian socialism. With the public's anger currently being directed at both government and Wall Street, an ideology that proclaims Big Business and Big Government to be two sides of the same problem might find a lot of takers. (The other obvious candidate here is, of course, distributism, but I suspect that's just too sane to catch on any time soon.)

I have a technical question for you. The tech bubble of the nineties was before oil prices started to rise in earnest, so what was the cause of that bubble, in addition to the wealth disparity giving the rentier class more money than they knew what to do with? (I'm guessing the science-fictiony allure of high tech has something to do with it.)

Seeing as how where discussing the vast conspiracy of the elites I'd like to float a third option. They know about the implication of peak oil, exponential debt, what have you, and they have know idea what they can do about it, other than try and keep business as usual going as long as possible. For example lets say someone/a group within the elite is fully aware of the problems we are facing. He thus decides to try and move us towards a sustainable/steady state economy, but he starts running into problems, firstly others in the elite are completely out of touch with facts on the ground, there not going to go along with his Eco-fascist gobbledegook, still others want to make certain that whoever has to make sacrifices during this transition, it isn't them. Then you've got the general population who most certainly does not want to take a cut to their living standards, you Eco-fascist you. Then you have to consider the consider the Geo-political considerations of how you keep other nations sending you enough resources to cushion your fall and at the same time preventing a new power from rising to clobber you. I guess to paraphrase, it seems to me that the current world systems is quite firmly lodged in a Nash equilibrium.

Also to leave off from my last comment. Is it fair to say that during an age of religion non-rational social capital is built up. Then we a society is enters an age of reason a lot of that social capital is torn down. That is to say an age of reason general starts with the idea that the pillars of the society can be arrived at from pure rationalism, then when it turns out they can't the pillars gradually weaken and erode until suddenly greed is considered good?

Joseph, I never said that there weren't any conspiracies. There are always plenty of those to go around. The delusion creeps in when people assume that whatever they don't like must be caused by the One Big Conspiracy to which all the bad people belong.

Edward, they might be deluding themselves along those lines, true. I wonder how many of them have realized that fifteen minutes after the rule of law collapses, their hired guards will accidentally point their Uzis in the wrong direction, and scoop the pot.

Gary, well, we'll see. Do you think people will be comfortable having less when "having less" amounts to abject poverty? That's what we can expect, you know.

Roger, I've seen the same thing many times over, especially in situations where a deeply held belief system happened to conflict with what was actually happening. Thus my suggestion that that's what's happening here.

Chris G, I've been saying all along that the neoconservatives cooked up a war against the Arab world in an effort to get control of as much oil as possible, once it became painfully clear that the Reagan strategy of letting the free market take care of petroleum depletion was failing catastrophically. That's business as usual -- and you'll notice that the neocons got tossed out on their ears when their plan failed messily, as of course it was bound to do. So? That doesn't justify the claim that every unwelcome turn of events must be caused by some undefined conspiracy or other. Also, I'll grant the greatest capacity for violence, but intellectual sophistication? No, there you're letting the myth of progress twist things around. Modern industrial society is far less intellectually sophisticated than it was a hundred years ago, by almost every measure you care to use -- even our propaganda is embarrassingly crude by 1912 standards.

Robert, I've met a few of them; I've also met their kids and grandkids, who in my experience tend to be detached from reality to an almost schizoid degree. The current American upper classes are composed of a mix of the two types, which does not speak well for their ability to deal with a world that increasingly contradicts the most basic assumptions of the culture in which they were raised.

Thomas, I don't do audiobooks, but I'll see if the library here can get the print book for me.

Judith, thanks for posting this! A fine bit of edged satire.

Mark, exactly. We've got two big speculative bubbles going right now -- one in US government debt, and the other in the fracking industry and everything connected with it. When those go, the results may be colorful.

Dagny, good question. A dollar today is not necessarily worth more than a dollar a year from now -- if I'm putting money into a retirement fund, for example, the opposite is true. The assumption that money is more valuable now than later may be a function of the generally inflationary nature of modern economies.

Robert, are you a Marxian socialist, or one of the various other kinds? If the latter, you get a pass, since none of those have been tried on a large scale. If the former, I'd point out that Marx's program has been applied a good many times outside of the former Soviet Union and its immediate empire; at one point quite a few regimes tried it out. Nobody managed to make the thing work without prison camps. If you want to propose a new democratic socialism, fair enough; if you want to propose social democracy on the European model, better still, as it seems to work fairly well; but if we're talking Marx, the gulags aren't the result of a heresy -- they're the normal product of the internal contradictions of Marxist theory when put into practice.

Marcello, the principal reason I expect a Marxist revival in the US is the huge publicity boost the Republicans are giving Marx just now. If they keep on calling any use of government funds to meet human needs "socialism," sooner or later you're going to see young American intellectuals reading Das Kapital, and away we go.

Ando, funny you should ask that. Stay tuned... ;-)

Mike, no argument there. There's no way this can end well.

Ricardo, all very good points. The attempt to construct a pseudoreligion out of politics has a specific name in modern usage, though it's one that has been misused so spectacularly for so long that it's going to take me several posts to clear away the muck. Yes, it's one of the options, and yes, I'll be exploring it as we go -- but it's not a good choice, and there may be ways to forestall it. More on this down the road a bit.

Bill, no, as I said to Marcello, it's purely because the GOP is engaging in such a loud and effective publicity campaign on behalf of socialism just now.

Rita, look into it and I bet the company is trying to sell shares of its allegedly hot new stock. In stock market jargon, it's called a "pump and dump operation" -- you pump the stock up with lavish news releases, dump the shares you hold on the chumps at inflated prices, and then let them take the loss. There's a huge amount of that going on in the fracking scene just now.

Enrique, funny. Many thanks.

MawKernewek, bingo. You get tonight's gold star for pointing out what should be obvious but all too generally isn't.

Think Again, how do you know that they're psychopaths? Have you had them tested? Or is it simply that your view of things requires them to be psychopaths? It may seem to you that hubris, peak oil, and the conflict between reality and a set of unquestioned assumptions about the world are insufficient to bring about the mess we're in, but that's exactly the point at issue; to me, those more than adequately account for said mess, and bringing in hypothetical psychopaths -- for whose alleged mental condition you have no evidence -- is unjustified.

Jeff, to my mind it depends on just how much clout the financial industry actually has in Washington DC. If the big banks really run things, it'll be a default, because that way the immediate losses focus on specific instruments that are subject to default -- say, T-bills -- and other dollar-denominated investments retain their value domestically, at least for a while. If we get hyperinflation, everybody's holdings become equally worthless. So I remain agnostic on which one we'll see; the one thing we can agree on is that the debt is not going to be paid.

Think Again, once again, what justifies your insistence that there must be some hidden circle of psychopaths in there somewhere? The factors I'm using to explain the situation are all readily visible, and -- as I've pointed out in posts since the early days of this blog -- the motivations behind conspiracy theories are not hard to tease out, either. Thus I see no need to hypothesize an evil cabal of madmen to explain the events of our time. Clearly you disagree, and that's your right, but your arguments seem distinctly unconvincing to me.

Mister R., you get speculative bubbles whenever too much wealth flows out of productive economic activities into pure speculation; you get really huge speculative bubbles when the flow of wealth out of productive economic activities happens because productive economic activities no longer make money. That's the difference between the tech stock bubble (an example of the first kind) and the housing bubble (an example of the second).

Dagnarus, I have no problem believing that there are some people in the political class who have a fairly good idea of what's going down, though there are others who seem to be utterly clueless. A Nash equilibrium is a fairly good model, made worse by the diffuse nature of power in the contemporary system. As for your analysis of social capital, that seems square on target to me.

I wrote a story about the shed that you can see in those photos, but it hasn't been published yet.

The shed is actually made entirely from recycled or re-purposed materials. It cost all up only a few hundred dollars, but a whole lot of labour. The only item purchased new were the concrete stumps and cement to anchor them and the shed itself to the ground. Even the nails and screws holding it together are second hand. Under the zincalume roof sheeting there is a commercial grade fire blanket that was a left over product from building the house. I hate waste.

The original intention was to build the house out of recycled / re-purposed materials too, but during the permit stage the rules completely changed (which are in legislation here) and that idea had to go out the window! There was a bit of unhappiness that day for sure.

I really appreciate you writing that as it was an excellent observation on your part.

For some reason when I say owner-built, people think the place is going to be some sort of mud brick special, half finished. Other people tell me that the house is really old and been in the area for at least a century (I copied the design and proportions from early farmhouse designs as they are very appropriate to the environmental conditions here). Apparently ripping off old designs that is an architectural no-no! Oh well, whatever.

Default is an extremely deflationary event; it destroys the banking system. Government will sacrifice the currency to save the banking system, which it desperately needs. Those big banks only need to perform nominally, not in real terms, so the financial institutions will protect themselves by pressuring the government to liquify their holdings. Then they will spend the money, and since the banks are closest to the printer, they will gain the most use from those dollars which rapidly devalue as they are passed down the line.

Your economics is a bit forgetful. As late as the 1990s, the U.S. was paying down its debt. That can be done in a decent economy with sensible taxation. Sensible taxation is the key. One constantly hears that the government is "going broke." If so, it's only because we won't tax sensibly. There is more money sloshing around in the economy than ever. We just aren't taxing it. And even in this sluggish economy, the U.S. is getting GDP growth close to 2 percent, more than enough growth to balance the budget if the political sanity to do so existed. I don't totally disagree with you about the end of growth. I'm just talking about the deficit right now, today. We could wipe it out instantly if we had the political will.

And second, about religion and the Dark Ages. I seriously doubt that religion explains it. Christianity, when you boil it down, is a quirky, soul-depressing, guilt-inducing religion with pathetically weak texts. Christianity contains nothing to serve as a guide for the preservation of civilization. Granted, the human religious instinct can be a powerful motivator and social glue, but it's easy to imagine theologies less soul-depressing than Christianity that would have been of greater benefit to people.

It's not about religion, it's about the smart people and where and how they collaborate. Today we might call them the creative class. In an economic breakdown, where do they go? After Rome, lots of them went to the monasteries. Why not? Monasteries were relatively safe, the food was better, there was order, there was learning, they were networked. It's not about religion. It's about smart, creative people. So the trick is to try to figure out where our creative class would go in a breakdown, to figure out what arrangements they would make for safety, food, order, learning, and networking, and to figure out what their organizing principles would be.

I suspect we would end up with two competing (and to some degree cooperative) types of institutions, just as we did in the Dark Ages. There would be the places where the rich would go to exploit without adding much value (the fortresses), and there would be the places where the creative classes would go. The creative class will keep the lights on and guide the rebuilding, not because they're religious but because they're smart and creative. Outside those places, life would be harsh.

I was responding to the apparent connection of the ACA to the "part-timing" of the American workforce, not disputing the latter. I just don't see a solid connection between the two, yet, largely bolstered by the fact, as the New American article you linked, that we have been trending that way for a long time. I think the ACA is a handy excuse, but not a valid reason, to explain what has been happening since long before its passage.

Which is ultimately neither here nor there, I suppose. Especially since shape-shifting space lizards are after my precious bodily fluids. Good god, why did you not warn us before?!

JMGYou wroteRobert, I've met a few of them [top 1%]; I've also met their kids and grandkids, who in my experience tend to be detached from reality to an almost schizoid degree. The current American upper classes are composed of a mix of the two types, which does not speak well for their ability to deal with a world that increasingly contradicts the most basic assumptions of the culture in which they were raised.

I admit to not having a ‘belief in God’ and have problems with my own experiences of ‘anomalous’ insight or similar ‘knowledge’, although I generally respect the validity of much ‘religious experience. But I must also admit my daily prayers for help, from wherever, in balancing my own sanity. In the wider setting I go along with WH Auden who would like a valley and a couple of mountain ranges between the poet and the man who could have him hanged: if I have not misquoted.

These guys are a menace and in some sense are sociopathic even among their own kind, but it is hard to avoid them in gerrymandered US political system. Our class divisions in the UK similarly have always done a solid job of self-perpetuation of course.

Traditions of power will come around it seems, and these people cannot be regarded as irrational, even if when viewed from outside they appear bonkers (a British term)? Goodness me are these people ruthless enough for Civil War?

(I realize this is starting to take up too much space in the comments so hopefully this is my last on the subject)

My hope is that the resurgence of socialism in America has more in common with Noam Chomsky and Howard Zinn than Karl Marx and Friedrich Engels (Engels especially; a pity it's not called Engelsism so we could demonize the more-deserving partner).

My own sense is that there's a not-insignificant proportion of American socialists who, like me, favor something like European-style social democracy from the top and I.W.W.-style collective organizing from the bottom.

James and JMG re: socialism -- ah those arguments make sense. Though I would think it is only one way that the conservative rhetoric might turn and bite them in their own posteriors! It'll be interesting to see what happens once Obamacare is fully in force and its inherent (large) faults become obvious to both major parties. Will the push be towards a single payer universal system (which we likely can't afford) or to an unregulated "market-based" system (which will exclude massive numbers of people)?

Of course as I have said multiple times here in the past, Peak Oil also means Peak Socialism, in a practical sense. Socialism is a child of industrialization, and it requires a functional fossil-fuel-based industrial economic system to actually work. So there may be a push for it, but we're just not gonna have the resource base to implement it in the way those promoting it would want. For one thing, our financial system is a ponzi scheme. If we want to raid the treasure hoards of the plutocrats to fund socialist reforms, we're going to find nearly all that "wealth" is paper (electronic), and it evaporates as soon as you try to "cash it in" en masse and turn it into actual goods and services.

I'll keep this brief, but I feel the need to add on to my comment above (it was either that or delete it): I only plan to vote for a no-party candidate because I live in an incredibly safe Democratic district. Last election I was shocked that fewer than 1% of voters in my district chose a candidate that was neither a D nor an R. I would not, repeat not, be voting for a non-D if I was in any kind of swing district. Since we have a winner-takes-all system, and the Republicans would bring their own kind of nightmares to governance, worse than Dems in my opinion, voting for a non-affiliated candidate only makes sense to me in my kind of district. Sorry, this is very tangential and way too political for your blog, but I felt I had to clarify what I said earlier. It's my opinion, and I'm very OK with no response to it.

Another factor may be the ability of religions to make duty-based ethical systems attractive. I seem to remember a presentation on of the difference between duty-based and rights-based ethics, and it pointed out that social groups that adopt a duty-based ethics tend to build up social capital while in groups that adopt a rights-based ethics the members tend to consume social capital for their own advantage.

Personally I prefer ethics to have both duty-based elements and rights-based elements. Some modern virtue ethics seem to strike a good balance by deriving rights from universal duties. Roderick T. Long has done some excellent work in that area, though his libertarian and rationalist biases shine through in some places.

Do you have any idea on how long it will be before the public and average person really starts to feel the heat of America's economic situation? I am in my late twenties and am planning to make a significant investment to go back to school for Electrical Engineering (I currently possess a history degree and work for a petroleum production company of all things). Do you feel things will be safe for 5-10 years?

JMG, thank you for the reply on points about conspiracy, the capacity for violence, the capacity for propaganda. I wish to test your reply and apply some intellectual weight to your reply in order to see if it can hold - minding that you reply to everyone here, but I do appreciate recommendations on further reading either inside or outside your work, as you provide readily to near-all who solicit.

I see Television, radio, and the internet, as fairly monolithic in this country, and where not, to some extent, the exception proves the rule. There are a diversity of voices available on the internet - and many are quite misleading. It takes a pretty exceptional degree of critical thinking to muddle through the noise, a capacity not too many have. Many people, in turn, leave aside that struggle and simply accept the blather of the mainstream. The biggest case in point: near-total blackout on discussions of peak resource, although it underpins the whole world economy, thus the polity, thus the culture - and thus even the noosphere and (I like your term) theosphere.

Evidence of the monolithic mainstream can be no more readily apparent than the general ignorance about and unwillingness to deal with a future of less energy. This is not to say that there have been no voices to the contrary, some even have gone nearly mainstream, such as E.F. Schumacher. the corporate-controlled mainstream ignores it. Their motive, while unknown, seems to me fairly easy to imagine: keep the average American doing what the average American does best: consuming more and more, keeping the economy growing, enriching the owners of property (both tangible and intangible), and as much as possible keeping those people from accumulating either real property or political power. Divide and conquer is the order of that conspiracy.

I concede, what I'm describing, what other commenters are describing, is not, by definition, a conspiracy; rather it is an unspoken acceptance that we will either a) ignore the future, b) accumulate as much ownership as possible to ward off the coming ill general effects to the economy in the future, or c) just keep doing what we've always done.

Now as I write and think about this subject, it becomes a little clearer: it's not so much a consciously manipulative propaganda by a conspiracy of wealthy bankers as simply a general acceptance, and an inherent result of the mechanisms of the current system, that we will ignore the future and keep on pillaging resources from future generations, as though they will never exist. It is essentially, greed and selfishness - more powerful, subconscious forces than any conspiracy could ever possibly be. Now I get it. :)

What built-in economic mechanisms, what underlying belief system? the former is, I believe, the pressures that debt puts on everybody to continue to produce the energy resources to pay back that debt; the inherent inequalities in the debt system (which is what capitalism is, in many ways, at its core) that divide people from each other, mitigating the chances of developing a common project for sustainability; and, as I look around, as I talk with people - the unspoken assumption that humankind has escaped from nature, no longer bound by the earth, now a transcendent Ubermensch whose destiny is for the world to become his Will and Idea. I get it now: those subconscious beliefs, products of a few centuries using up millions of years of concentrated energies, has made us hubristic, deeply.

Suddenly it reminds me of one of those Ben Franklin quotes: "Only a fool must learn be experience."

We're a bunch of sophomores.

It is simultaneously heart-breaking, and liberating. I don't have to worry about trying to stop it. It's gonna happen, just like water flowing down a mountain side.

Thanks again, JMG, for another excellent post. I feel like I dip back into reality when I visit here, then go back to the delusional world. I am so so so grateful to you and also to all these wonderful people who post thoughtful comments!

Robert Mathiesen makes a fascinating comment about the most wealthy and powerful people being not the most intelligent or far-sighted people in the room....they are by far the most energetic, the shrewdest and the most ruthless people I have met ...

I also agree with JMG that Steve's definition of collapse as "unpleasant things happening at greater frequency" is extremely helpful. It really boils it down.

Thanks to everyone! I learn from you all, and don't feel quite as alone.

Deficit spending and trade imbalance are the forms that tribute takes in the current Empire. It's not just the U.S.; we are the American arm of the European (culturally and racially) Corporate Empire System. The U.S. can write bad checks via the printing press or "quantative easing" for so long as this empire continues to work.

I note that one of the big beneficiaries of the Afghan war has been Chinese corporations. In terms of the world economic system we are (forgive me Italians) "Guido the enforcer". We can't win wars, but our ability to blow things up is fairly motivational. The U.S. Navy performs the role that the British Navy played in the 19th century. Yes, we keep the sea lanes open for our own purposes, but it also benefits everyone else's Merchant Marine.

Hence, China, Europe and others in the "developed" world give the U.S. a lot of slack economically. It's cheaper for them to let us benefit by unfair trade deals and printing money than it would be to build up their militaries to any great extent.

When this arrangement becomes unprofitable for them, then things get ugly. However, the U.S., having a bigger military than every other nation combined, will still be the 800 pound gorilla on the planet. Even if OPEC cuts us off, we still produce a third of our own oil. Civil aviation and Joe and Jane commuter will suck hind teat, and the fuel will go to the military, agribiz, tug and barges and freight rail.

While China and or others may have a way to neutralize our carrier groups via ballistic missile or overwhelming cheap ordnance, few other nations have any ways to "project power" either. Your scenario set in East Africa last year could just as easily play out on the U.S. West Coast, with China losing it's invasion fleet.

My conclusions are, of course, my own; but much of the information I based it on and the logic, I borrowed from you. You have quite an inspiring writing style, and it is helped me think about many subjects in new ways. Thank you.

I often think that peoples want for a grand conspiracy stems from their desire for a easy recognizable fix. Just find out who/ what this conspiratorial group is, isolate them, make them stop their wickedness- all will then be fine. Like finding an on/off switch for a machine.

The many many invisible greedy little hands theory won't do. Too squidgy for the mind.

On a sort of unrelated matter, I have had some fascinating reading up on Luca Pacioli (the father of double entry book keeping as we know it). A writer on magic and numerical trickery too ( go figure).I have been left with the profound feeling that DEB is the father of capitalism.

Tokens tokens tokens mental construct). Balance them any how you can. If you are a sovereign you have many ways of doing the balancing ( as a householder little tonone). Faith and fear are required (& maybe a little magic ;)).

Balancing the books on natural resources...well that is not nearly as easy.

@JMG: Very good posting. When there are no profits to be made from passing achievements of civilization to the next generation, only those with a mission prevail. And secular missionaries tend to be less enthusiastic than religious ones, as history shows to us...

@Cherokee Organics: Back in 2003 couple of builders made circular house, partially subterranean, in Jyväskylä area of my country. It was made from reused construction waste, and building costs were below 5000 marks, or roughly around 1000 euros. House is livable around year in Finnish environment with -25 Celsius (or -77 Fahrenheit) frosts during winters. It is not comfortable, but it gives you shelter and place to live.

Unfortunately strict zoning rules of Finland prevent building this kind of structures to residential areas, but we are trying to build distantly similar structure to tree farm zone next summer, as cottage for extended stays near wilderness. Whole circular space is build around capacitive stone oven, and capillar water brake is done by gravel bed and raised wooden floor with hollow-core slabs below... Partly subterranean building is something new for me, so I wait this project quite a bit... Your shed is has been even cheaper to build, but environmental predicaments are also very different.

In the book “Collapse” Jared Diamond examines the conduct of diferent ruler classes of ancient civilizations what confronts against big problems that threatened their existence. Diamond is moderately optimist about ours ruler clases, and our future. I´m not, because they´ll be “protected”against the troubles originated by the Long Descent. It will be a situation similar to the happened in the viking colony in Greenland, wich finished with the dead by starvation of all their members; first the more humble and finally, the chiefs About your confidence in religions, socialism and other religions, based in the promise of a heaven in the earth, it is impossible their adaptatiion to a world with growing poverty.

Masonery is not a religión, i think that it haven´t future.

Druidism, was displaced by the roman paganism and by the christianism, and for this reason I think that it haven´t future.

The luteran and calvinist branches of the christianism, I think that too will dissapear because they think that the material progress is a signal of to be predestinated for the heaven.Catolicism, will have future. But I think that probably will have more future some type of catarism. Because it is against the material world.

Of all the ways, christianism present a lack for this new situation. Encourages the individualism, and in a world with limited resources it will be perjudicial.

The only societies that i know that not are based over the asumption of the inexistence of limits for the material expansión are New Guinea and Tikopia. And I ignore all about the beliefs of those peoples.

In Spain the collapse lasted during the century IV.In the form of the invasions by the Suevos Vandals and Aalan.

The visighots,ejected the mentioned before invaders, and ruled in Hispania from 418 to 725, when they were defeated by the arabs. Till the arrival of the arabs Hispania was the most prosperous country of the post-roman world

In reading the back and forth between JMG and ThinkAgain, and seeing good points in all the posts, a question occurs to me.

The population has a certain percentage of psychopaths, some 2% or so, with an additional couple of percent who score fairly high.

Where are they? What are they doing? What affect do they have upon society?

Of course, quite a few are in prison. But not all.

Different professions have been tested, with some not attracting many psychopaths, and others attracting far more. Nurses and doctors score low, but not surgeons. Lawyers and CEOs and the clergy score fairly high.

It's not hard to see why. Nurses and doctors work very hard and psychopaths don't have that kind of inner stuffing. Surgeons may score higher because there is more excitement, risk and money.

The law profession presents many opportunities to make money, especially if you don't much care about right and wrong.

Now, I happen to know a couple of lawyers who are very fine people. It's just that for a person of a certain bent, there are a lot of opportunities.

ONETHING,To understand the problem with the workers of a society not being able to afford the products they produce for the capitalists look upMajor Clifford Hugh "C. H." Douglaswho demonstrated it mathematically. The major solution throughout history is one JMGreer has mentioned before-empire. By forcing the provinces to buy the excess you enable the workers to keep working. The second is to make the workers borrow the funds they need in order to buy the excess goods, something easy to do with a fiat currency issued by a private central bank.

As mentioned above Marx is another source of understanding for this phenomenon.

@David DaltonOn whether or not the US government can pay off it's debt via taxation, this might be the case with respect to US debt owed to Americans, this would effectively be wealth redistribution within the US, something which the US government has the ability to do, although this might run into problems when it comes to taxing the wealthy to pay off social security, after all most of the wealth in America is fictitious and only worth anything so long as people believe in the ponzi, old people on social security need real goods and services however. It completely breaks down when you come to the $5.6 trillion in debt to foreign governments however. Let's say that Obama visits president Xi Jinping tomorrow with $1.3 trillion dollars to pay off the US debt owed to China, what Xi Jinping going to do with it? He can't use the money to buy US exports, for that to work the US trade deficit with China would have to disappear, Most people would probably object to selling China the western Sea board, so really China has to park the money back into US treasuries if it wants to be able to do anything useful with them. Now as to the growth of the American economy, if the US were still calculating GDP and inflation the same way they did in 1930s then GDP has been then GDP has been shrinking since around 2000

I agree with Think. The elite are not (generally) stupid, even allowing for the tendency for large groups to exhibit a collective IQ well lower than that of the mean of its members.

I recall a comment made by George W. Bush in response to a question about the Saudis raising oil production to reduce the $148 spike in oil prices. George said he'd already asked them, and that they would do it “if they can”. This speaks volumes: they know about peak oil. Never mind what politicians, or economists, or the corporate media say, the elite know.

Concerning the global fiscal and economic crisis, another comment made by Mr. Bush while president with regards to the massive bailouts after the consequent fiscal meltdown was also telling. He explained these were necessary because otherwise “this suckers going down”. Well put I'd say.

Its certainly possible some of them are self deluded or stupid. But lets face it, if George W. Bush (not generally regarded as the brightest spark in the fire) understands peak oil and the threat to the global economy, then, stupid or not, so does the rest of the elite.

Then again, JMG is correct, people do no generally consciously act contrary to their self interest. So how do you explain the behavior of the elite in face of the obvious? They act like they don't care. Here's why they act this way: they don't. The elite of any society, collectively, care no more about the people they exploit than a parasite cares about its host. This is so for the simple reason that this is in fact the relationship of the elite of any society to the rest of that society.

Now they certainly do care about their wealth. And not (generally) being stupid people they cannot not know this is based on the global economy made possible by cheap energy. So why don't they do something. Simple, they can't. There is nothing they or anyone else can do to make energy cheap again. Even keeping the price at about $100 involves poisoning you quicker (tar sands, deep sea, fracking etc.). A price they are willing to pay because you pay it more than them. I'm not saying there are not things they could do to help the rest of us. I'm just saying they have no interest in this for the reason just given. Call these “sins of omission.”

A comment made to me by a local interpreter for the UN in Sudan a few years ago comes to mind. He described the period, called the “Interim Period” in the Comprehensive Peace Agreement between North and South Sudan, as the “Period of Looting”. The elites were looting the treasuries of the “Disputed Areas” in anticipation of another war. The reason for such looting was clear. When you have no faith in the future, you grab everything you can.

I think this explains the behavior of the global elite today. They are not deliberately undermining the basis of their wealth. No, they are grabbing everything they can while they still can. This is the period of global looting.

Regarding “never wise to blame on conspiracy what can adequately be explained by stupidity!”. I recall a conversation I had with a military intelligence officer who worked for years for the United States government (on loan – spying on Americans). We were discussing the stunning series of intelligence failures of the various intelligence organizations in the USA to anticipate the events of September 2011. We came up with the phrase “Incompetence explains more than conspiracy.” Though such incompetence does not explain away the evil coincidence of having a “Pearl Harbor” moment just when you wanted one. Perhaps we could now add “Yes, but sins of omission explain even more then incompetence.” Conspiracy requires too much coordination. Failing to act is dead easy.

On the other hand, the sort of deliberate “disaster capitalism” Think referred to in his second post is well documented by Naomi Klein in her book “The Shock Doctrine”.

JMGEarlier in a response to my comment you stated "PhysicsDoc, one of the problems that has to be faced in any discussion of religion is the tendency, pervasive in the Western world to see everything through the filter of Christianity --" and you are absolutely right, I made the sloppy mistake of equating religion with Christianity. I also do not doubt your references to historical episodes where other religions completed the arc of civilizations without having persecution on the menu (I will have to read up). If one looks around in the present day or even in the past, however, one finds many examples ofBuddhists persecuting Christians or Muslims,Muslims persecuting Atheists and Christians, Polytheists persecuting Christians (see early Roman history),Hindus persecuting Christians,Christians persecuting each other and Pagans...you get the idea.I know you won't agree but in my opinion all religions are a form of superstition and promote irrational thought processes which in turn promote irrational behavior. This under the right or wrong circumstances can lead to very dysfunctional behavior including the persecution of other humans or groups.

Think Again, er, I think you need some basic courses in logic. You're claiming that one small subset of people belonging to the financial elite shows some characteristics of psychopathy, therefore they all must be psychopaths, because their actions had consequences you don't like and therefore they must have deliberately and maliciously intended those consequences. If you're going to get into psychological concepts, I'd encourage you to start with Jung's concept of "projecting the shadow."

Jeff, I'm familiar with the effects of default, as well as those of hyperinflation. Default can be aimed -- the government can decide which pieces of federal paper are written off entirely, which ones simply have payments suspended, which get rolled over into bonds due in 2100, and so on. Hyperinflation shreds everyone equally. There are arguments in favor of both, and opposed to both -- thus my agnosticism.

David, you might consider being a little less smug and making fewer assumptions. Of course the US was paying down its debt in the 1990s -- it was riding the last gasp of the age of cheap abundant energy, with petroleum prices hovering not far above $10 a barrel. There may be more paper money sloshing around than ever, but real wealth? Quite the contrary. As for religion, you might try some actual historical research into the roles of Christianity and other religious traditions in dark ages, rather than simply regurgitating talking points off some atheist website.

Liquid, I read the captcha as a warning that orcs have been after your precious bodily fluids since August of 1991. It's at least as reasonable as some of the claims being made these days!

Phil, good question. A lot of people on this side of the pond are stumbling toward civil war; the last time that happened, even the people who played the largest role in setting it off had no clue what they were going to get. I suspect the same thing will be true this time around, if that's what we get.

James, if you want to get some other kind of socialism into circulation, I have a suggestion: do something to make that happen. It's not going to happen just because you want it; it might happen if you get out there and start getting the ideas you prefer an audience.

Bill, oh, granted. I don't think the far right has any idea what kind of backlash it's likely to set in motion.

Sunyata, many Americans are already feeling it. Many others aren't. To paraphrase Bruce Sterling, collapse is here, it's just not well distributed yet -- but it's getting better distribution one pink slip and local disaster at a time. In your place, I don't know that I'd take the risk of running up student debt.

Dltrammel, you may want to try to post the URL, because the link didn't come through.

Chris, that seems like a reasonable analysis to me.

Anne, you're most welcome! I'm glad to be able to offer a meeting place for those of us who don't buy into any of the official versions.

Dianna (Glenn), the Chinese have no need to invade our west coast, though you're right that if they gave it a try they'd be just as vulnerable. As for the US military, though, my take is that it's more likely to turn out to be an 800 pound white elephant as the ability to pay for it goes away.

Marlow, exactly. Natural resources can't be conjured into being by playing games on balance sheets, no matter how loudly economists insist this will work!

At first I wanted to argue with investments without profit; cows give milk, even if they don't grow forever, but we have to fence them, and fix those fences continually; there will be yield, but there's upkeep - you're right.But is there a hopeful side to this, at least for labor?Will automation continue to inexerably eliminate labor, then pit workers versus would-be-workers, driving down remaining wages (not hopeful), or will rising prices of the resources (that industrialism uses to eliminate labor) inspire the focus of efficiency efforts to shift from labor productivity to resource productivity? While those before us used energy to eliminate labor via industrial technology, in a realm of limited labor and lush resources; we face a world full of pollution, yet also full of seven billion willing workers, and this world is emptying of resources of energy, minerals and atmosphere to pollute into.

It seems possible that we will use more of what we have a lot of, us seven billion people, and less of what we have little of, resources; land and capital, via using differing technologies; some old, some new, all less labor-efficient and more resource-efficient. Would this increase in labor demand further strengthen Labor's bargaining hand in wage negotiations with resources, like Land and Capital, or will work wither, and automation reign? I'm not sure, but one certain voice is that of Hazel Henderson, who said:

"...The basic nature of the painful transition involves a necessary shift from economies based on maximizing labor productivity (and therebycontinually increasing the capital and energy intensity of theirindustrial production), which heretofore has been based on non-renewable energy, to economies that must now conserve capital, energy and materials and more fully employ their human resources. This shift will require the development of a newly designed, more efficient production system based on renewable resources and managed for sustained-yield productivity.

This is a tall order for today's economists acculturated during abrief period of fossil-fuel-based abundence, which provided the slackthat allowed massive Keynesian pump priming and demand-stimulationwithout instant inflation."

Juhana, exactly. The question is simply which religions are more likely to do the job in which parts of the world.

Bike Trog, quite possibly. A lot of collectibles have had their value inflated substantially in recent years, and may lose a lot of that apparent value in a hurry.

Anselmo, well, there we disagree. Today's Druidry is not the same as the traditions of the ancient Celts; as for Masonry, it's survived some pretty harrowing experiences already in its history, and organizations along similar lines have shown quite a bit of staying power elsewhere in the world. I'd encourage you not to be too quick to be sure you know what will survive and what won't!

Onething, of course there are psychopaths in positions of power, just as there are in every other walk of life. There are also psychopathic housewives; this does not justify claiming that all the world's housewives are cackling and rubbing their hands together as they plot the destruction of society.

Think Again, fair enough; it's reasonable to bring up the issue of personal action. If you've been reading here for a while, you'll likely have some idea of what my take on things has inspired me to do to get ready, and to help other people get ready, for the Long Descent. What are you actually doing to fight these hypothetical psychopaths of yours and their evil system? Posting diatribes on the internet doesn't count, by the way, since all that does -- if your theory is correct -- is make sure the NSA has your name on a list...

Thrig, excellent! A very good book; I hope Think Again takes the time to read it.

Agent, a good case can be made that there's a whole lot of looting going on, and some of it may be inspired by a conviction that things are going to fall apart in short order. Some of it may also be inspired by simple greed, and the fact that you can get away with looting the company you're supposed to manage in today's culture of corporate kleptocracy.

Still, you've raised a crucial point here, which I haven't discussed recently as much as I should; the ruling classes are not a monolithic body. They're a fractious, squabbling tangle of competing power blocs, each trying to maximize its own access to wealth and influence and each also trying to block others from doing the same -- which is to say they behave like human beings everywhere do when there's no outside pressure to play nicely with each other. It's entirely plausible that some of them have a sense of what's coming; others show absolutely no sign of it; and no doubt there's 2% or so of psychopaths in there somewhere. Nearly all of them, though, went to the same handful of universities, grew up in the same narrow range of social settings, and participate in a distinctive groupthink, as aristocracies always do. It's the mismatch between that groupthink and the facts on the ground, to my mind, that explains most of what's been going down over the last decade and a half or so.

PhysicsDoc, I could cite a fair list of atheist groups that have engaged in savage persecutions of rival religious and nonreligious movements -- and I trust you'll spare me the circular logic by which those supposedly don't tell us anything about atheism, while equivalent actions on the part of religious groups tell us all about religion. That dysfunctional behavior is pretty much a human universal, in other words, and it does no credit to atheists to watch them pretend that it only applies to people they don't like.

Moshe (offlist), please don't attempt to post sites where people can download copyrighted books without paying for them. I lose thousands of dollars a year in income to people who steal my books that way, thus my tolerance for that habit is pretty limited.

JMGI would actually consider atheism to be a kind of religion since a strong claim is made for something which cannot be proven or disproven and is therefore belief-based. However, since atheism often claims to be based on rational evidence-based thinking your point is well taken.

I have noticed that indeed, since the fall of the Soviet Union, Christianity has had a great revival in the former USSR.

I see it first hand where I live in Ukraine. Christianity is big around here, especially among the older generations. It is very common to see people take off their hats and cross themselves while going by a church--even on public transportation.

I have never been to Russia, but the Kremlin in the old capital of Moscow certainly has close connections with the Orthodox church--as is evident by the Pussy Riot scandal.

RE Think Again's comments: If it's not too late to join the fray, I'd like to say, in hopes of detente, JMG's phrase that ruling classas "participate in a distinctive groupthink" is one description of conspiracy, though on levels that vary from deliberate and even pathological to a completely subconscious and passive participation. Regardless of how elites take part, though, power is only yeilded to them by those (sadly far too many) of us who think we want what they have, which for a responsible person can be an onerous burden, and turns others into loose cannons, as in Scott Fitzgeralds "appalling carelessness of the very rich." But just being angry at the "illuminati" is a waste of energy. They will eventually self-destruct anyway (and, yes, be replaced by others.) Living well (as in sanely) is the best revenge. (Of course if they really are shape-shifting lizard people from outer space we're screwed anyway, so why bother?)

"In a contracting economy... investment is a negative-sum game, the average investment loses money, and an investment that merely succeeds in breaking even can do so only if steeper losses are inflicted on other investments."

Capitalism is thus not viable at times of prolonged decline. After glorious 2 centuries, it starts to act as the old-fashioned rent-extracting feudalism - on steroids. Adam Smith would recognize, how stifling is that.

Sunyata:For what it's worth I'm a physician in my early 30s and I only plan to do this for a few more years. I want to go back to school and train in perhaps chemistry, materials, metallurgy, something along those lines. So I think changing paths is still very doable in your 20s, 30s, in my opinion, whatever the political situation may be. 40s and beyond? Harder to say. We only have so much time. The trick is to find something you are interested in and have some conceptual idea of the sustainability of such work mid or post collapse.

Which brings me to my next point. There was a post above that sort of defended doctors, saying there wasn't much psychopathy amongst them. Based on my experience this is true, most doctors are genuinely compassionate and well meaning.

Still, the health care industry has been instrumental in going along with one of the two big lies of modern society: that we are all going to live forever (The other big lie being that money is infinite and we are all going to be rich).

In my opinion those in health care should have taken the lead in being honest about the limitations and costs of modern medicine. They didn't do it, and now it's too late. Ruinous bankruptcy awaits both practitioner and patient alike.

The interesting thing about conspiracy theories is that Karl Popper once pointed out that they are replacements for God. i.e. the underlying reasoning is that if God isn't making everything happen, then who is?

Popper believed that atheists were particularly prone to conspiracy theorising.

(potential double post)As someone who, frankly, finds the theosphere silly, what do you recommend? Should I join a church under false pretenses? Found my own sincere religion? Go Unitarian?As an aside, I recall that in a speech Neil Gaiman cited a statistic that authors who allow their works to be downloaded make more money than they lose, but cannot recall his source. I know I preferentially buy books from authors and publishers I have downloaded from previously.

In general I'd agree with the tone of the article, but to muddle through a few centuries of decline something is missing: cooperation.

The hardware for sharing ideas is in place; it's called the internet. Even if the internet becomes becomes a bit slower or less reliable , it still will be a formidable way to share ideas.

Unfortunately, the current legal system of "intellectual propriety" blocks sharing solutions. If you have a book about gardening which you think might interest others, you legally can't upload the book until 95 years from publication.

Patents and copyright: It's six of one and half a dozen of the other. Boldrin & Levine show that steam engines only took off after James Watt's patents had expired. Not much has changed since. Patents are mainly used as a legal threat, blocking others from using a solution.

The internet is a tool for sharing ideas which is available to us, and wasn't available to, say, medieval monks. But copyright and patents put a halt to people sharing ideas and solutions. That's a luxury we increasingly won't be able to afford.

My guess is that, as US military and economic influence wanes, we'll see other countries gradually dropping copyright and patent law. New Zealand, for instance, no longer accepts software patents.

I'm with you on this matter, it is a real problem. Australia's soils are so old and depleted of potassium (industrially farmed soils elsewhere require a lot of years to repair too). Few want to even talk about it.

The first convict that applied slash and burn agriculture in the country was provided with a land grant (which he subsequently lost gambling). It is only a short term solution at best.

As you post more, Think Again, your views become more nuanced and clearer (at least to me).

Your first few posts did leave me (at least) with the impression that you were positing a single overarching, carefully engineered, long-term, rational conspiracy among the wealthy. Having rubbed shoulders for half a century with a number of these wealthy men and women, and seen their blind spots and limitations up close, that view seemed to me -- to speak bluntly -- ridiculous.

Your more nuanced views, in terms of a widely shared set of values and attitudes among the wealthy, do have merit to them.

But I still find myself very deeply troubled by what seems to be your call for righteous indignation and justice against these people.

Frankly, I have never believed in either the possibility or the desirability of Justice -- not even when I was very young. Justice is always a very sharp, two-edged sword with a poisoned hilt. When it is unsheathed, it almost always ends up creating havoc instead of the better world that its proponents hope for. Nothing is so easily exploited by the corrupt as a call for justice, embraced by the multitudes. The corrupt give it lip service while using it as a warrant to rob and bully.

And righteous indignation seems to me an even worse waste of our limited energy. I do not think that there ever will be, or that there ever *can* be, a morally or ethically better world than the mess we live in now, simply because of human nature.

So any call to put one's energies into any such far-reaching project for justice, whether individual or social, just deflects our limited energy from our far more important tasks: growing food, bandaging wounds and soothing hurts, raising individual children to master themselves before trying to master others, doing what we can to help these same children live as inherently flawed human beings in their irremediably flawed society, and seeking what limited wisdom and love we are capable of grasping.

Re conspiracy theory, I had always thought that it simplifies things to deny it. That way, there is a major wrench in the works you don't have to think about, what with people and societies as they move through history being quite complex as it is.

At the same time, it behooves us to always keep in mind the role that the common people play in contributing to the situation.

The comment made by someone above to the effect that the 1% aren't that smart but are the most energetic (motivated), shrewd and ruthless lends support to the idea that many at the top are sociopathic, if not smart enough to pull off conspiracies.I see no reason that a certain amount of stupidity is incompatible with conspiracy theory. Both can be going on. If, say, the Koch brothers funded the Tea Party and got some of their goals realized in the short term, it doesn't mean they are savvy enough to have foreseen later consequences, such as JMG's proposed socialist backlash. Some conspiracies are much more likely and easier to pull off. The general financial shenanigans are not even new, and that is why they are illegal or were so recently.

Oh, now I see your response about the housewives -- Of course I don't think all politicians and rich people are sociopaths, far from it. But I do think it would be good for society as a whole to not have this as an invisible problem. What I think may happen is that as societies' political systems fall into despotism, the way is open for more of a certain type to fill positions of power. As we see the increasing militarization of the police force, more young men who might like the chance to bully and hurt people might apply for jobs, and their type could be more tolerated.

Apologies for jumping in on the conversation, but I think you're engaging in a bit of binary thinking here. While JMG doesn't believe that the ruling elite are a group of psychopaths working together to destroy the economy, he has time and again throughout the history of this blog labeled their behavior as fairly awful and self-defeating. He has time and again noted that they're on a path that could well lead to them hanging from a lamp post. He says that in this very post. How exactly is that defending them?

I would say both of you are quite unimpressed with the behavior of the elite. You just have different ideas about the motivating factors and levels of intent behind that behavior.

Just because JMG disagrees with you over motivation doesn't mean he's defending the people in power. Your apparent inability to see and acknowledge this weakens your position.

"(Glenn), the Chinese have no need to invade our west coast, though you're right that if they gave it a try they'd be just as vulnerable. As for the US military, though, my take is that it's more likely to turn out to be an 800 pound white elephant as the ability to pay for it goes away."

JMG,

The thread is the place of religion as a tool? solution? so I left out some details in the interests of brevity. To expand on this side trip:

If the U.S. is cut off from trade, especially oil, we will be dependent on territorial resources. One likely reaction would be to prioritize fuel use as I outlined previously and make a resource grab. That would probably end badly, and may result in a variation your "East African" scenario playing out.

A creditor, say China, owns Idaho, and or farmland in Africa. So long as the respective national and local governments acquiesce, they can do what they please with their asset.

Now, say, Kenya is broke and or the U.S. has been cut off from world trade. The obvious reply to a demand from the creditor is "Come and get it; if you can."

So unless China really gets on the ball with control of the Indian Ocean _and_ a good amphib fleet, just having people owe them money is not very useful. And Idaho is right out of the question for them.

In my analysis I was trying to look at resources under physical control of a nation, rather than money. As long as we have labour, food and materials, we can keep some manufacturing going. One of my fears is that it will be wasted on military hardware for foolish, self destructive resource wars, rather than ecotechnic or legacy infrastructure.

Back on topic.In a Burkian historical sense, I suspect if religion carries anything useful through the coming decline it will be religion(s) that slowly evolve rather than something created on this forum or elsewhere.

to ThinkAgain and JMG,ThinkAgain's recent post with helpful link (10/18/13 at 10:35pm) has certainly thought behind it, as I can personally attest. Yes, a certain percentage of the population is sociopathic or psychopathic (virtually interchangeable terms) and estimates range as high as 4% of the North American population. (source: The Sociopath Next Door)My problem was a charming chef who I accepted as a tenant. The charm quickly faded. To be brief, the best advice is to avoid entirely any such person, and as such types seek positions of power, this becomes a bit of a sticky wicket!

Here is a comment by a friend who is kind of a believer in the religion of Progress, but not a fanatic (what do you think? I am pretty ignorant about economics, so I am not in a position to comment myself):"Some of this is interesting. Some of his facts are way off. He is not apocalyptic but overstretched on some things, in my opinion.1. The govt does not spend twice of what it makes.Wikipedia says: "During FY2012, the federal government collected approximately $2.45 trillion in tax revenue, up $147 billion or 6% versus FY2011 revenues of $2.30 trillion. ""CBO's preliminary estimate of the 2012 "total budget" deficit was $1.090 trillion."So it "makes" about 70% of what it spent. 2012 is a bad year because the economy is still limping along with high unemployment. I imagine most years are better than that.If the economy grows faster we potentially can outgrow deficits to some extent. That of course assumes the myth of "growth" which does not take into account destruction of the environment and using up resources like oil, soil, etc

We do have an inherent problem as do the Europeans , that Social Security and Medicare are growing problems since people are living longer and fewer workers are paying for more retirees. Eventually something has to give- higher taxes or lower benefits or both. However, higher taxes can certainly be handled , especially by the rich (although that may not be enough).2. You can't use an individual as an analogy for a gov't. It just doesn't work.3. Quantitative easing is NOT a way to keep interest rates LOW. In fact it is criticized by the right as a cause of inflation. In fact we have not seen much inflation despite the quantitive easement although the direction of the effect is to increase money supply and thus cause inflation, whether you actually see inflation depends on all the other factors pushing the economy. e.g. If you spend an extra $5 on candy it does deplete your finances but doesn't likely bankrupt you.4. "They’re all basically stopgaps, and it’s probably safe to assume that the people who decided to put them into place believed that before the last of the stopgaps stopped working, the US economy would resume its normal trajectory of growth and bail everyone out. That hasn’t happened, and there are good reasons to think that it’s not going to happen—not this year, not this decade, not in our lifetimes." this is probably not correct and is a bit of catastrophizing."

Brian, excellent! Yes, that's already a significant factor in global economic shifts, though I don't know of a mainstream economist who's willing to think about it in those terms. One of the reasons that so many jobs are being outsourced to the Third World, though, is precisely that it's very often cheaper these days to hire people at Third World wages to do something than to build a machine to do it.

PhysicsDoc, in that case, no argument at all.

Think Again, "what I do isn't bad compared to what those truly awful people over there are doing" is the essence of projecting the shadow; as I said, you really should learn something about Jung's concept, rather than simply brushing it aside as an impediment to your hunt for scapegoats. As for trying to be a nice person and using a little less -- tell me, if you were on a sinking ship, would you consider being nice to your fellow passengers and not taking up quite so much space on the last bit of deck above water to be an adequate response? The point this blog has been trying to make all along is that the industrial world is facing an immensely difficult and challenging concatenation of crises that will leave few lives untouched. There's a huge amount of hard work that needs to be done in order to get anything of value through it, and the distractions of scapegoat-hunting don't contribute anything useful to that.

As for the NSA, one of the things I've noted with some puzzlement is that the very people who insist most loudly that the current order of things is run by psychopathic maniacs, or what have you, are the last people to consider what this claim implies for their own lives. If you're right, and the people who run this country are deliberately dynamiting the last scraps of constitutional government and the rule of law, then anyone who goes around denouncing the current regime in public needs to live with the very real possibility that at some point in the years ahead, they may wake up at 3 in the morning to find armed thugs breaking down their door, and get dragged out into an unmarked van, driven to some isolated area far from help, shot in the back of the head and dumped in an unmarked grave. That's how things are done in societies run by psychopaths, and it's something that takes place in quite a few countries right now. If you're right, in other words, the last thing you should be doing is mouthing off online, where your comments can be monitored and your name can be put on a list. If you insist that that can't happen, then are you sure you believe in the claims you're making?

Michael and Yulia, it'll be interesting to see if that transmits itself to younger generations. If it does, it's far from impossible that the Orthodox churches may become much more influential in worldwide religious affairs than they've been in recent centuries.

Unknown, I'm not sure that equating groupthink with a deliberately malign conspiracy really works. As for your practical points, though, no argument there at all.

Nicholas, to give any kind of coherent answer, I'd have to sit down with you and let you talk out your reasons for finding the theosphere silly, pose some questions, consider the answers, and jointly work our way to an answer. As for the purported benefits of internet copyright theft, well, all I can say is that Gaiman may attract a different sort of thieves than my books do.

Andy, if I may be frank, that's malarkey. Copyrights don't prevent people from sharing information; they simply mean that the person who devotes hundreds or thousands of hours to the creation and collation of that information has the freedom to devote his or her time to that very hard kind of work, instead of having to give up writing and flip burgers instead. If you actually value the information, then you can go to the very minor trouble and the very modest expense of buying the book. If you don't value the information enough to do that, I question whether you value the information.

Phil H., isn't it, though?

Glenn, oh, granted, creating a religion from scratch is usually a losing bet, anyway, and a religion invented on an internet forum is almost guaranteed to be a waste of time! That's not the point of this discussion, though.

Robert, psychopaths are unpleasant people to be around, to be sure. So are people with most other character disorders. You'll notice, though, that nobody gets bent out of shape about the disproportionate fraction of politicians who suffer, say, from histrionic character disorder!

Iuval, your friend is thinking in terms of mainstream economics -- I note especially his last two points here. I'm not. Given that there are very few points of common ground between our viewpoints, we'll just have to see how things turn out.

Regarding the stimulating discussion on elites and their intentions, I don't really think there is a single elite as such, just various constituents of the system who for their own reasons want the system to continue and assume that it will, and so it does continue for now. Some constituents are more powerful than others, of course, and they all have wildly different motives. But what they have in common is that what they do depends on the system in which they operate continuing to be intact.

Many of these constituents we would probably agree are wearing the "black hats": certain wall street bankers, certain politicians, certain CEOs, etc. It's probable that some of them know the system must end at some point, and there are even a few who go public and write books and blogs about that. But the vast majority of them just prefer to continue operating within it because that suits them better. So they continue to get super-rich and powerful, because that is what they do and, as Woody Allen said, 80% of life is just showing up.

Then there are lots of others who we might agree are wearing the "white hats" that are also working to keep the system going. My dear daughter, for example, is a newly graduated inner-city social worker working in a program that helps high-functioning young adults with various behavioral problems get a higher education. Wonderful program, absolutely wonderful. But it is as dependent on funding from the system as anything else is.

This is not in any way to draw some sort of moral equivalence between social workers and bankers, of course. But perhaps it illustrates that different constituents of the system, good and bad, are just continuing to do what they do within it, IMHO. This will continue until it doesn't. And I don't think anyone would ever accuse a bunch of social workers as being greedy conspirators because they prefer to keep a system going that funds their work.

"a religion invented on an internet forum is almost guaranteed to be a waste of time! That's not the point of this discussion, though."

JMG,

Agreed, and I don't think it's what you're trying to do. I only mentioned your forum because some of those commenting seem to be headed that way.

I take your point that religions have carried cultural and academic legacies through hard times in the past. Also your point that we seem to be experiencing a change in religious sensibilities currently. I take your question to be whether this will combine to carry something useful through the decline, and are speculating as to what it's form might be. I look forward to the next essay on this topic.

Glenn

Marrowstone Island

P.S. Great year for mushrooms on the Olympic Peninsula. I took a short bike ride to Ft. Flagler State Park and came home with a dozen Blewitts, 2 dozen shaggy Manes, one Agaricus bisporus and a Lepiota naucina.

Expanding on your reply to Brian, I have been thinking about our future where all of us have been replaced by robots. Mike "Mish" Shedlock in his blog, among others, talks a lot about it. Even though he knows about peak oil, he obvious has not thought about it's implications. The more interesting thing is even with his fine-tuned understanding of most of the distortions that our printing of money is causing, it hasn't occurred to him the current move to robots is increasingly a cheap money phenomena. You can't capitalize labor, but you are doing that with robots. You buy the robots, pay the low interest on the loans, and then eventually, since (almost) no one seems to actually pay off loans anymore, you default. Great deal. Great profits.

With humans you have pretty much have to pay full cost as you go along. And since, of course, there will always be free/cheap money around....

As far as the copyright issues go, there is always your local public library. Every library I've been a member of has had a system set up to request book purchases as well. If you want to read a book, but can't afford it and the library doesn't have it, submit a request for purchase. This kills two birds with one stone (actually three). The author gains a sale, you get to read the book, and you allow others the opportunity to read the book and thereby spread the knowledge and influence of the author!

JMG: “the person who devotes hundreds or thousands of hours to the creation and collation of that information has the freedom to devote his or her time to that very hard kind of work etc” : the logic behind copyright clearly explained.

@Andy -- there's a big difference between patents and copyrights, the biggest being that copyrights make sense, but patents (as they now exist) do not.

As JMG has pointed out, everything is subject to the law of diminishing returns, which is certainly true of "invention." To invent something in 1700 was very different from inventing something in 2000.

The original idea was to allow an inventor time to commercialize and profit from an idea which would, after 17 years, become part of the public domain, or the common wealth. That's why the patent has to make a full disclosure: no secret ingredients allowed. The technology is disclosed, and after 17 years, anyone can use it. In the meantime, people can study it and try to improve on it.

The law of diminishing returns makes it difficult to take any new patent to market and make any money back in 17 years: most, if they contain any real innovation at all (many don't) require major capital to bring to market at all, and will probably come nowhere near making that back in 17 years. So the usage of patents has changed.

As they are now used, patents are bargaining chips for corporations to cross-license so they can avoid being sued for infringement. It basically works like this: you've patented "black," so you can sue me for infringement for using black ink on my letterhead. But then, I've patented "white," so I can sue you for even having letterhead. Rather than pursuing this in court and me forcing you to use pink paper, and you forcing me to use red ink, we "cross-license" black and white, and now both of us go on about our business.

If you don't have any patents, or don't have enough, you start to take on troll-suits, and you have no leverage to make them stop. For tech companies, not having patents is like not having teeth.

The innovative content of most modern patents is near zero. One of the most successful patents in the last fifty years was the "pentanut" -- a five-sided hex nut. Why successful? Because I think it was GM that patented it, or AMC, and they started to use it on their vehicles. That meant every repair shop in every one-saloon town in the country had to buy a new set of wrenches, and guess who got a cut of each wrench with the patented "pentanut" technology? This was a "successful patent."

There are a bunch of highly technical and fairly gray rules about what can and cannot be patented, and every submission has to be compared against existing patents, so a full patent filing is expensive and time consuming. I'm just now in the process of finishing up a disclosure for a patent, and once the legal team takes it on -- they've already expressed the thought that they should move ahead with it -- it will be about two years before we find out if it can, in fact, be patented.

So the patent is not really intended to block invention, but they way it is now used certainly has that effect.

Haven't read the post yet, but strolled through the first couple comment sets, and it sounds like it will be informative as always.

@Cherokee Organics:Chris! Nice work with the PRI piece! Love what Geoff Lawton's doing, and love your developing site. I too started stumbling upon the logic of permaculture systems before I formally studied it. A water catchment ditch on contour here where runoff was causing problems, a chicken tractor helping re-establish some grass there, a vermicompost tub outside the kitchen door...although, as a permie, I have to ask: where are your weeds, man?? Your place is beautiful!

We just got in (about 10:30 pm U.S. ET) from our annual trail ride in the Missouri Ozarks - 12 hours slightly NW of us by car - and my quick tour of the farm by lamplight revealed healthy hens and fresh eggs for breakfast, a little fresh rain on new fig and raspberry plantings that are establishing fast, and a new litter of rabbit kits! Don't know how many yet...

Will catch up more with you fine folks after a bit of rest and a chance to read the main attraction. I did a 15-ish mile foxtrot with a sore knee on a palomino mare that didn't necessarily want to foxtrot, through some brutal country yesterday evening, and five states away, which finished off a run of 7 of the 8 rides possible in the 4 days we were there...before driving home with my wife, a 3-year-old and a 5-year-old today! Whew, man, I'm whooped, but it's good to be home...

This and your recent posts brought to mind Will Durant's pithy summary of the same idea, from Caesar and Christ, 1944, p. 604:

"Thousands of Christians, including many who actually practice Christianity, interpret the disturbances of our time as the predicted portents of Christ's early return. Millions of Christians, non-Christians, and atheists still believe in an imminent earthly paradise where war and wickedness will cease. Historically the belief in heaven and the belief in utopia are like compensatory buckets in a well: when one goes down the other comes up. When the classic religions decayed, communistic agitation rose in Athens (430 B.C.), and revolution began in Rome 133 B.C.}; when these movements failed, resurrection faiths succeeded, culminating in Christianity; when, in our eighteenth century, Christian belief weakened, communism reappeared. In this perspective the future of religion is secure."

"...there are enough reasons to suspect that the official accounts of events of 9/11 ought to be seriously questioned, that one should pause with the suggestion that those in power are bumbling along like everyone else."

You have to believe it was bumbling. Otherwise the implications are too scary to think about.

JMG, you were not sure "when layoffs and cutbacks would occur." IMHO, soon after the US dollar is no longer the world's reserve currency. Every time the gubbermint does its 'Kabuki Theatre of Shutdown/Default,' I think that this is an incentive for nations like China and Russia to create and implement an alternative reserve currency. When the US must pay for trade goods in "Gold Rubles (or other)," we will get debt default, hyperinflation, and layoffs in government.

Think Again, the few psychopaths/sociopaths I have known tended to work alone, not in groups. Does anyone know of historical instances in which psychopaths/sociopaths worked with each other as sociopaths to enhance the effectiveness of their evildoing? Seems unlikely that a sociopath would join a group, when his/her life revolves around the theme "Its ALL about ME." :-)

Danced unto the reckoning, danced into these meditative halls, shadows lengthening; the anchorite knew what this meant through the hues and slate stone, it must be concealed, from the hidden, an augury of another day , soon all would be held in the balance , to account....

Yes, i guess you are quite correct, darkness is not so daunting to those that train themselves to see at night....Thanks AD ...

It is unfortunately more complicated than that. Andy does have a point that fees inhibit the sharing and use of information. Free peer reviewed publications are more cited and influential than subscription peer review journals. (Unfortunately, I don't have time to track down the source on that) However, academics are under a lot of pressure to publish these days and, needless to say, the articles would be produced whether the journal is free or not.

Intellectuals, such as yourself, that live outside of academia have bills to pay and no professional need to publish. You do, however, have a financial need to publish. To clarify, that means you can only be a professional writer if writing pays the bills.

Therein lies the problem. The use of information is best when free but the generation of information is best when rewarded. This is a simple matter of incentives that gets very complicated when reality is invoked. The exact trade off that benefits society most is not a simple thing.

The founding fathers laid down a mandate for copyrights and patents in the constitution. The rules for patents have not changed much with respect to time frames but the time frames for copyrights have been greatly extended. In my view this is because business had a need to profit from patents and to use them cheaply but not so with copyrights. Copyrights are mostly produced by individuals or companies and then acquired by large businesses and sold to the public.

Phil, I need to reread that anyway, so I'll get that on interlibrary loan pronto.

Yupped, that's an excellent point. Plenty of people have good reasons, or what they consider good reasons, to do whatever they can to keep the system running, even knowing about its harsh downsides. The downsides of decline and fall are a good deal harsher...

Glenn, thanks for the clarification. It's a point that deserves making, since trying to manufacture a religion for the sake of various secular goals has been quite the popular project at certain times. Congrats on the mushrooms, btw! Yum.

Doctor W., good. Yes, I tend to discount the robot thing once we get past the age of limitless cheap credit -- though exactly when that comes to an end is one of those really interesting problems in catastrophe theory.

Justin, an excellent point. I have no issue whatsoever with people checking books out from libraries -- the library's bought the book, library sales are a modest but real part of an author's income, and since you have to bring it back in three weeks, there's a significant incentive to buy your own copy if you really like the book.

Crow Hill, thank you for getting it. It's the same logic behind the fact that you can't walk into your favorite brewpub and expect to get beer for free -- there's a lot of hard work that goes into those full glasses.

Shark, you get tonight's gold star for even knowing who Will Durant is. I recently inherited my dad's set of the Durant histories -- he's fine, he and my stepmother are just gearing up to move to a retirement apartment -- and it's a real pleasure to rediscover an old childhood friend.

KL, the habit of deciding that things are too scary to think about strikes me as unwise. History is pretty scary; so, in all probability, is our future. That said, nobody who's part of this conversation will probably ever know exactly what happened that day.

Emmanuel, that's a possibility; still, there are other potential triggers, I suspect.

Religion may have a future in what it has to offer in a descending futurist scenario. Apparently China is currently a point in case. I read that China is a lot happier to condone Christianity because they are punching above their weight as per charity in China, taking some of the burden off the state.

Certainly in the future West, as people are hurting, religion will do well. Bread and answers. Spiritual security is better than no security.

It's got me to thinking. Given that most of the religious action through any Western future nastiness will be Christian, given that they tend to be less inclined to share when they're in a solid position of power, and given that the common believer gets more zealous the more they need to secure their spot in God's good books when preachers are saying the badness is a result of spiritual deficits...

How secure do you JMG feel about being a Druid? Yes, you'll be able to help your community, etc. But even Jesus was accused of getting his power to perform miracles via the agencies of demons. The more some edge towards doctrine, the more some will ignore your goodness and push the Pagan = evil view.

I wonder how those of us who subscribe to minority religions will fare. /|\

Re: intellectual property, one might observe that the explosion of the idea-as-commodity approach has partly to do with the US need for exports requiring as little oil input as possible. Books, patents, academic articles, etc., while some oil goes into their production, once produced carry and multiply their value (i.e. attract rent) with almost no marginal outgoing expenditure of oil (since the Internet, virtually nil per unit). It's one of the important ways to return USD to the American economy and prevent a disastrous trade imbalance.

The problem-- Stirling Newberry pointed this out-- is that the mechanism permitting minimal-oil distribution also readily encourages theft, so the state and the cartels have to adopt some aggressive legal strategies to try to cut losses, which are increasingly ineffective/counterproductive and which rub a lot of people the wrong way. A noxious byproduct is that some people feel righteous about depriving book authors of income.

For me this dynamic also explains a lot about academic career and publishing trends, to say nothing of the business approach that has stalked the academy since the 90s. Having dipped my toe into the lit-crit establishment, I'm struck by how the dominant discourse structures encourage work that is endlessly recombinant without much in the way of a stimulating idea to show for it. This chiefly creates a great deal of uninteresting paper that can be monetized, and incidentally serves the career needs of the million naively aspiring postgraduates (while harnessing their starry-eyed willingness to work for free). But of course it's a sin to deconstruct the deconstructivists.

"At some point in the years ahead, the US government is going to have to shut down at least half its current activities, in order to bring its expenditures back in line with its income."

One government solution to this is to shut down half its activities. The other solution is to double its "income."

Someone pointed out that our money-as-debt model has reached its logical conclusion: the government doesn't pay for its programs with tax money at all; it pays for ALL of its programs by borrowing money, which is created out of nothing. When it taxes, it simply destroys the money it already borrowed into existence.

Right now the system is badly out-of-balance because the government isn't destroying money as fast as it's creating it, which would normally devalue the dollar and lead to inflation -- or hyperinflation, at the rate it's being created. One of the things that mitigates the inflation is the growing gap between the rich and the poor. The rich are becoming outrageously rich at a phenomenal rate, but that money doesn't go into circulation, it idles in closed loops within financial markets. You could create a thousand-trillion dollars, and if debt-bonds were all held by the same person who pocketed all the cash, there's no net effect. There's enough money leaking into circulation to cause pretty stiff inflation, but what's mostly inflating is speculative trading in the stock and bond markets.

It would be a fairly simple matter (on paper) to tax back and destroy all of that stagnant currency. That is, in fact, exactly what is going to happen (but more catastrophically) when US currency collapses, whether through default or some other mechanism. All the paper wealth will vanish into the thin air it was made from. It would make vastly more sense to tax it out of existence in a controlled way, but that would never be tolerated by those whose paper wealth was being destroyed by taxation. So I think a future collapse is virtually guaranteed, but it isn't that there aren't alternatives: it's that the alternatives are unpalatable to short-term thinking, particularly by those who have the most influence in the game.

JMG, what about his first point? That is a factual issue. Is your estimate of spending twice what is gathered in revenue based on other years, or a cumulative number? Why the discrepancy? Or is twice more just an estimate (70% more is about equal to 100% more?). Let's be accurate so as not to give people ammunition to attack what is not the main point.

First, if JMG is right, and I suspect he is, that non-rational motivations (faith) are stronger than rational ones, our entire exercise here is really to get rid of as many ideas about what to do and come around to things felt in the gut. For instance, I think many, many people love nature deep in their hearts, just as it is; but surrendering the power we have now - which is, at its core, a desire to escape, rise above, or transcend nature... this is hard, and arguably futile, since pretty much everyone else is more than willing to step forward and exercise that power instead of you. It is like the Nash equilibrium: the game will still continue without me, and my sacrifice will be in vain. It reminds me, loosely, of following the ancient path of "renunciation", whence came the Upanishads and Vedas, among the oldest known writings in the world, and arguably the origin of much of our metaphysical, spiritual and religious thinking ever since. But the renunciants never did a damn thing to stop selfishness and greed from happening throughout history, just as it did.

I think much of the ideas that came from those renunciants, say, 5000 years ago or so, was the idea of the oneness of all things. Religion is about that oneness, about the personal self being "re-bound" into the larger whole, of the tribe, or city, state, nation, humanity, life, or what have you. The Upanishads and Vedas also reflect a recognition of the failures of language: how things can both be and not be at the same time, same place, same respect. How there is a consciousness that can reflect reality, with all its contradictions, just as it is.

Later in Hinduism came the more refined and sophisticated ideas of dharma and karma. the core teaching, IMO, is that one should hold fast to what is right and good even in times of chaos: Dharma lasts through the hard times- without being attached to outcomes or results. that is the central teaching of Hinduism.

This is how the many elements of a human society can be re-bound together into one. this is a worldly image of the oneness the renunciants discovered by rejecting society many years before. this is how pyramids get built, or rockets to the moon. Religion: being bound into a single project.

"sychopath" and "sociopath": we're talking about people who do not see other people as people, but as instruments or means to ends, are we not? But aren't we all doing that to some extent? It brings to mind the axiom from the native American elder: "we do not inherit the Earth from our ancestors; we borrow it from our children." Even if we are doing what are good works in themselves (caring for the poor, the disabled, the elderly, the unfortunate) we are, at this point in history, using an unusually high level of resources to do so. My paying employment now is to be care-taker to an elderly man (who was a nuclear physicist, no less!) who cannot walk, bathe, eat, on his own. It is not my labor that supplies his needs, it is the fossil fuels we borrow from our children that do it. But I ferry the goods to his mouth and his body into the little death each night, and get the much-needed paycheck. I'd rather not participate in a system that steals from the future. but there is no more space in the forest, so I don't know how to renounce this system.

The money system is a problem. Money is a means of exchange for trade goods and services. But it also entails debt. Debt entails that labor will be added: one gets a loan, and over time one repays the interest by adding labor. The debt burdens now are so large, and have been for so long, the only way of repayment is to continue to plunder the energy (i.e. labor) resources. Selfishness and greed - wanting more and more and more - like a psychopath or sociopath - are institutionalized; those motives are built into the system. No one knows where the off-switch to this machine can be found: it is inside each of us, and symbolized by the abstraction of desire: the currency.

One could offer solutions, such as debt-free currency, a negative-interest currency, or a "Jubilee" - a grand debt-forgiveness. The key barrier is that those who have more are loathe to surrender their advantage in a time of increasing scarcity, in the zero-sum game, with so many people on the planet, so many appetites, from the ancients here to the new babes everywhere. Couple that with the underlying non-rational belief system that progress will rescue us from scarcity, as well as the inability to agree with each other about how to challenge the ownership class or to take political power from them, not to mention the fear that has been stoked in people's hearts, a fear that keeps the US government spending well over half of our resources on defending our resource advantage...

It's madness. Because of the great boon in resources that we found in the earth some 200 years ago, the "black gold" or "the black semen of the earth" that appeared to end slavery (for a time), our religion went from one that was about the personal self being bound into the greater whole, to one of the personal self being bound to take as much as one wants as quickly as one can.

"conspiracy" is to go "with" "Piracy" - that is, with "deprivation" of others - to go around the law. "Dharma," a very ancient term, includes in its meaning "law" but means more too, something non-rational: a belief in the oneness of all. But we're all involved in that conspiracy: in a twist, in this time of massive energy surplus, now waning, the law has become conspiracy.

The rational mind nitpicks, squabbles, looks for exceptions, looks for advantages, something to make the personal self feel good. this is a barrier to shifting course from our current religion of the self (bound up with progress).

Lastly, further to the latest comments @Joseph Nemeth, as well as others in the arena, what's happening with money creation, debt, inflation?

I would suggest that the money that is being created through easy credit from the Fed and sucked up by the wealthy, corporate owners, banks (as described by Nemeth): is being used to acquire property (land, resources, intellectual property, control stakes) around the world. In speculative bubbles, such as our own mortgage bubble or the commercial RE bubble in East Asia in the '90's: after the bubble bursts, the ownership class purchases at a discount those properties that passed through loan default. The ownership class does so using the money created by the government-controlled central banks. thus, we see the stock market growing, but no increase in employment domestically, and the middle class evaporating. The stock market U.S. increasingly represents ownership of foreign land, resources, corporations, and IP.

The effect is to centralize control of property among those who already have property, in its many forms. Thus, the system ferries more and more people into the rentier class, fewer among the ownership class. And it is world-wide.

As for the idea that we will someday hang the CEOs, politicians, et al among the ownership class from the lamp-posts: it's not a certainty. First, the capacity for violence in this age is staggering. Second, most people don't know what's going on, and are easily misdirected by the propaganda machine. thus, in large part powered by the same energy resources that are the sub-text in all the blog posts here - and it should be remembered, largely ignored in mainstream discussion - the ownership class could effectively hamper efforts to deal them justice, simply by having all of us "have-nots" fight amongst ourselves. this is pretty well reflected in the politics in the U.S., where the vast majority of people are divided equally into two warring camps, thus neutralizing their political influence and ensuring that the status quo continues as it always has.

On top of this, most everyone gets their information about the world from the mainstream media. Translation, corporations- the owners of resources in an age of increasing scarcity. So people can't work together on common purposes, end up spinning their wheels in the flood.

Thanks to JMG and also to Joseph Nemeth for his useful clarification. But Joseph neglects a point.

Banks are 'private' and ostensibly must be profitable concerns. Their power to issue credit in Fractional Reserve Banking effectively increases the supply of 'money' and takes power away from Government, who then is not the key authority issuing money.(Banks themselves do not necessarily borrow what they lend and do not hold in deposit more than a small fraction of what they lend.)

We can remember, for example, that the prompt cause of the recent western financial crisis was the lending by private Banks et al of money to people who used it to make money - and to service their 'debt' - from assets that were believed to be priced on a rising trend. When this 'bubble' failed, from want of real return on this kind of 'investment', governments decided to take over more of the monetary supply. Somehow this has come to mean that the same business plan, even in the absence of real returns from an expanding economy, must continue.

JMG seems to have the nub of it - a stalled economy is increasingly now being asked to not circulate money through normal government supported services, for the duration, whiles that previous dodgy private lending is wound down. The hope is that real profit margins will recover. But the resulting smaller 'real economy' and thereby a decline in real 'returns' has meant that consumption must suffer, with the risk that business with tangible assets producing goods and services increasingly becomes unprofitable as sales decline. There is a risk that productive business cannot take on new debt (real investment) or even service the cost of original private debt. And perhaps can no longer meet obligations such as company pensions, thus again contracting aggregate consumption.

If, as seems the case, declining profitability (margins) and real incomes were already becoming the norm through the last decade or so, despite the increase in private lending and borrowing, then governments 'stepping in' will not easily solve the matter, even if there is temporary restoration of growth. And we have witnessed something like this during the last 5 years. The old business model does indeed look inadequate, even if GM & airlines etc did not go entirely for scrap! And new high-cost oil does not an economy make!

I don’t really pretend to join all this together, but thought it worth giving it a shot.bestPhil H

I thought I'd make a comment about the government as household model of government finances. This was one area where I disagreed with you in this post. I think that part of the reason for universality of government debt throughout the world is that for the last 300 years or so the world economy has been a positive sum-game whereas double-entry bookkeeping is zero-sum. In other words in order for the private sector to be in surplus the public sector has to be in deficit (either that or your net exporting to a different country which has a deficit in either the private/public sector or both). Thus the massive public sector debt isn't so much a bug, but a feature of the current economic system, and in some measure a requirement for it to work properly. I think a more obvious problem for the US is the balance of trade deficit of roughly $700 billion, and of course the balance of trade deficit with mother earth which is about to come due. That said I agree that the US will likely default in the not so distant future.

"My own sense is that there's a not-insignificant proportion of American socialists who, like me, favor something like European-style social democracy from the top and I.W.W.-style collective organizing from the bottom."

"Never be deceived that the rich will permit you to vote away their wealth."

That Popper essay is spectacular. I deeply love the first point, that most systems we live within have arisen as unintended consequences.

But I wonder how much of the discussion around conspiracies is people talking past each other.

A funny rebuttal I once heard to the question of whether a mysterious group of people sat around in some room planning the latest outrage was, "What? Do you think they are having a picnic outside? Of course they are sitting in a room."

Today's example in my corner of Cascadia is the pro-business BC Liberal gov't's machinations to give logging rights near-exclusively to the big five timber companies. This is a classic example of people scheming in rooms to give benefit to their cronies.

But did the US gov't conspire to fly planes into the WTC? Something of that scale succeeding seems hard to believe.

So, day in and day out, people are planning to do stuff you disagree with. Is it a conspiracy? Maybe not so much.

Thanks. What is a "weed" anyway? The best description that I've come across is: A plant out of place.

The green stuff under the fruit trees is a huge diversity of plants which is grazed by the wallabies, kangaroos and wombats. They save a lot of mowing hassle and convert the herbage into manure and randomly spread it about the place. You are correct, the more "weeds" and the greater the diversity of those "weeds", then healthier the place is.

A number of commenters have dismissed the risks of quantitative easing.

The comparison of a country's economy to that of a household economy remains valid from a big picture perspective.

One risk that is often overlooked is:

No one seems to note or talk about the fact that the strategy of quantitative easing is subject to the law of diminishing returns.

A brief history of the Fed's quantitative easing programs shows clearly that the required scale of the response is escalating (Source: Wikipedia:

- By June 2010, the Fed held $2.1tn of bank debt, mortgage-backed securities, and Treasury notes;

- November 2010, QE2 was announced which meant buying $600 billion of Treasury securities by the end of the second quarter of 2011;

- September 2012. In an 11–1 vote, the Federal Reserve decided to launch a new $40 billion per month, open-ended bond purchasing program of agency mortgage-backed securities;

- December 2012, the FOMC announced an increase in the amount of open-ended purchases from $40 billion to $85 billion per month;

- June 2013, Ben Bernanke announced a "tapering" of some of the Fed's QE policies contingent upon continued positive economic data. Specifically, he said that the Fed would scale back its bond purchases from $85 billion to $65 billion a month during the upcoming September 2013 policy meeting. The stock markets dropped approximately 4.3% over the three trading days following Bernanke's announcement; and

- September 2013, the Fed decided to hold off on scaling back its bond-buying program.

The pattern above is simply showing that it is taking more quantitative easing (over a remarkably short period of time), just to maintain the economy as it stands today.

The definition of effective is: "successful in producing a desired or intended result".

From one perspective, it could be argued that this is an effective strategy in that it seems to be maintaining business as usual, but for how long is the question that few seem to want to address.

PS: The numbers involved are so large, that they are beyond my comprehension.

@ Phil Harris & onething: We never, and I mean never, use Fahrenheit scale here in Nordic countries. I tried to convert between scales by heart, and obviously made a mistake. Thanks for correcting it :).

About this socialism discussion going on here, I must go with Bill Pulliam: "Peak oil means peak socialism" is a brilliant observation.

I have been born and raised in country based on social democracy, and problems of this system have been visible for long. Support base for Social Democratic Party has been shrinking fast, and especially blue-collar male workers in traditional core trades of social democracy support base have been deserting en masse to right-wing populism. I know, because I used to work in heavy steel industry myself and belonged to Steel Workers Union, one of the biggest and most politicized unions of this nation. Even there majority of younger (under 40 yrs old) guys were practically antagonized against Social Democratic and old People's Democratic Parties, being either totally hostile towards politics in general or supporting nationalist right-wingers from True Finns... I was no exception from this rule myself.

Trying to discuss why this is so leads invariably to heated polemic with lot of straw men flying around with nasty Halloween masks on, so let's not go there. My personal belief just is that if Social Democracy cannot pass it's legacy to new generation even here, where whole nation is build around it's basic principles, how it could do so in any other part of the world? Social democracy is like rotting corpse of zombie, that has not yet noticed it is time to say goodbyes. It is sub-cult of religion of progress, and because it was such for those in the bottom who have been already sucked into abyss of globalism and diminishing margins of profit, it's traditional support base has been lost to neotribalist message banging drums in bowels of society. Jack Donovan is right: we are tribal animals.

Vision about what good future holds by party leaders coming from exclusive circle of academically trained, invariably upper-middle class background and those actually working in coveralls has just drifted too much apart to be reconciled anymore. Actual workers and those claiming to represent them live in separate but parallel realities, miraculously sharing the same space. Things considered "liberal and progressive" by aristocrats of party leadership are actually bringing destruction and havoc to those working class neighbourhoods they claim to stand for. So I see no resurrection of social democracy possible, at least in the Eastern Europe.

Continuing somewhat with my previous comment, this was our third consecutive year at this trail ride in the Missouri Ozarks, and in that time I've sort of taken on the role of one of the camp's go-to naturalists. This time out I collected 8 different species of edible mushrooms and taught my companions how to identify an amanita called the Destroying Angel (arguably much more important than knowing the tasty ones!), identified owl calls around the campfire, and feasted on luscious ripe pawpaws we spotted along the trails.

The "camp" catches your breath the first time you see it - more like a small town than a camp. I would love? to know how many millions of dollars in horse trailers, trucks, tack, horses, facilities, cowboy hats, and so forth, were represented in that "camp." Mostly so I can just say "Good grief! What an enormous use of energy!"

Hauling horses hundreds of miles with giant trucks is turning our purpose of the horse on its head, but I dare say that a lot of these folks would be more prepared for a sudden collapse than the average sports car or sedan driver in America. Though I don't expect a sudden collapse that sends us all scattering for our doomsteads in the woods.

Perhaps a more useful thing that comes out of the energy dump that is this modern day cowboy settlement is a pervasive sense of community. Most of the people there are Christians, or pretend to be, and a lot of them are farmers, ranchers, veterinarians, animal nutritionists like my dad and his wife, or agribusiness people. In other words, they are in some way tied to agriculture...and all the defining characteristics thereof. In America, that kind of cultural continuity is hard to come by.

As an ex-atheist, I pine for that kind of community, which is probably why I hang out here so much. It's the only "place" I know of where so many level heads of the new religious sensibility reside.

Nuance is hard to convey via the internet I'm afraid! The "weeds" comment was mostly intended as a permaculture joke. I should probably start using more emoticons like you do!

I think there is only one weed on Earth: fossil fuel-powered Homo sapiens. Not man - man belongs - but fossil-fuel powered man. Although there have certainly been some pesky microbes, plants, fungi, and animals stuck in my craw from time to time!

Question: do you also eat the kangaroos, wallabies, and wombats? I think I remember you mentioning that you're predominantly vegetarian, although to my carnivorous mind, you'd just be missing a chance to stack functions!;)

A few synchronous things this week, in light of recent discussions here:

http://www.pressherald.com/news/A_study_in_druidry.htmlA school of druidry opens in Maine, seems like that transition is picking up speed.

The local Freemasons have begun advertising for new membership on the local radio stations. I'm agitating for my husband to join, but the nearest lodge is actually quite far, and we're transport-limited by choice and necessity.

My coworkers and I were recently informed that effective as soon as the additional positions can be filled, everyone's hours will be cut to 29 or less. I'm extremely lucky in that I *want* to be part-time to have more time for my own projects, but many of my coworkers are already dependent on several forms of state aid, and reducing their inadequate incomes by a further 1/4 doesn't help anyone. However, as the "resident hippie," I have noticed a distinct uptick in the general interest when I mention things like pressure canning my own meats, raising poultry, coppicing/wood heat, and buying cheap veg direct from farmers to stow for the winter. Several people have approached me privately for advice on improving chronic medical conditions with natural means, and a few have asked me for a split from my mother vinegar culture. The times, they are a-changin'.

@Phil -- There are two issues, almost unrelated at this point. One is the financial game. The other is the real economy.

The real economy gave us the illusion of exponential growth for a short century or two, and the math is straightforward. Place a population of clever yeast on top of a large pile of sugar covered with a thin layer of inedible plastic. One yeast discovers how to dig through the plastic, and lives the good life; all the excess energy he produces goes into digging for more sugar, and distributing it to the other yeasts for "profit." Some of the other yeasts learn how to dig, and produce more and more usable sugar. A supply-and-demand economy ensues, with producers and consumers, but since the amount of excess energy available for economic expansion remains a fixed percentage of the total energy produced, you end up with the capacity for exponential growth in the resource stream. This allows an exponential growth in the population of consumers. So demand and supply both increase exponentially, and the economy grows exponentially.

Then they hit the bottom of the sugar pile in spots, and some digging expeditions come up empty-handed. They now regularly waste some of the excess energy on fruitless effort, and the value of the exponent shrinks -- it's still exponential growth, but where they got 10% growth before, it's down to 8%, then 6%, and finally 1%. At some point, they start to expend more energy digging up sugar than the amount of energy they get out of the enterprise. It has peaked. The economy starts to shrink.

But our yeasts demand economic growth, particularly the investment class, which feels entitled to exponential economic growth. In fact, if they don't get their expected yields, they threaten to take their investment capital elsewhere. So some yeast comes up with the clever idea of unhitching the money system from the real economy. Unlike sugar, money can be created out of nothing, for no effort at all. Yeasts distance themselves from the "dirty" business of sugar-mining, and rely entirely upon money to procure their needs. The money supply can and does grow exponentially, but the sugar doesn't, so you get monetary inflation. It gives the illusion of exponential growth of the economy, but it doesn't mean diddly in real terms. It only looks like economic growth because ... well, frankly, because yeasts are clever, but not terribly bright.

There are lots of detailed games in managing the money economy -- the Fed, fractional reserve banking, chained inflation measurements, the GDP as a metric, trade deficits, currency devaluation -- but none of them matter, because the money economy is pure fiction. You can do anything you like to "fix" the economy, including negative interest, jubilee years, payment holidays, tax holidays, recoinage, adding "In God We Trust" to the dollar bill. None of this changes the fact that the sugar takes a bigger chunk of our excess production every year, just to keep producing it.

re: how those who subscribe to minority religions will fare....I think it will probably depend on what part of the country you live in, and at what time things really start to fall apart. JMG has written about the different regions of the US splitting apart based on cultural and other factors, and I think religion will be one of those. The South tends to be very Christian and to have (IMHO) a lot of human ego invested in it. Probably not so good for minority religions. In VT or the general NE or here in the PacNW, some of the least religious states in the nation, I expect more tolerance of different faiths. I do expect people will turn to faith, but I I don't expect it to be too traditional in form...for one thing, many churches here have already closed their doors. Dh and I attended various churches for years. One of the things that discouraged us was how many - how MANY - people in the different churches we visited or attended were over age 50, and, usually, most were much older than that. What will happen when those people die and cease their support of those institutions? In today's youth, 1 out of 3 fall into the "none" category of religion - only 15% fall into "evangelical". I suppose there could be reverse discrimination....just because people lose their religion doesn't mean they lose their disastorous human tendencies. It will be "interesting" to see how it all plays out, that is for sure......will there be a mass return to religion? Or will it be a mass turning to something else? I look forward to further posts on this topic.....

I just had to reply to @Ruben regarding conspiracies -most of the post I agree with but... do you really think some untrained rogue Arabs managed to pull off four hijackings, evade air defenses, and fly planes into buildings, in at least one case pulling off airborne maneuvers that well-trained pilots could not?

And I really liked the Popper essay too, he makes excellent points, but, by one side or another, sometimes conspiracies do succeed.

On the copyright issue, it's pretty clear that without copyright many of our favorite authors would not be able to support themselves doing the work for which we appreciate them. I find JMG's model to be quite generous, given that he makes the bulk of many of his books available to readers free online in blog format well before they're edited and published. I buy his books and drop some money in the tip jar because I'd much prefer he make a living writing than working in a nursing home or flipping burgers.

As for academic journals, there's no such thing as a "free" one. There are only journals that pay storage, editing, reviewing, and publication costs by different means. Some charge readers money, some charge researchers money (often $2-3k a pop to publish an article), and others skim resources from taxes, universities, or corporate revenues to cover their expenses. Regardless of the model, the real economic costs of time, expertise, data storage, and web (or paper) distribution are paid by someone, or the journal ceases to publish.

Given the (ahem) ephemeral nature of computer-based information storage and distribution, this whole "information wants to be free" fad is not likely to last as long as a solidly bound copy of, say, The Blood of the Earth printed on low-acid paper, for example.

Tying this to this week's topic, it's precisely because of the monasteries of Western Europe after the fall of Rome that many great works of the ancient world survived and were able to be shared in the West during the Renaissance and Enlightenment. The monks who chose voluntary poverty and self-sufficiency enabled themselves to cover the costs of maintaining and sharing those works over the period of centuries. Given JMG's assertion that an age of catabolic collapse of especially secular institutions is upon us, and that religion is the one option left to motivate collective action, it's worth seeing what lessons the past offers for our current predicament if our goals include the preservation and dissemination of information in the future, regardless of our preferences on who pays for such services today.

Tim, one of the things that makes this debate so circular is the insistence, on the part of the anti-copyright folks, that we're talking about information. We're not; anybody can take any piece of actual information from, say, my book Green Wizardry and, with proper citation, splash it all over the internet; this is only fair, since I took it (again, with proper citation) from other sources.

It's not the information that's at issue, it's what literary property lawyers call, not inappropriately, "the work" -- the creative ordering and presentation of that information in the form of a book, or what have you. Insisting that asking people to pay for the books they use, either personally or via tax dollars that support a library, does not restrict access to the information, especially not in today's media environment; anyone who wants the information and is willing to invest their own time in getting it can easily do so.

Babylon, if anyone around the time of Augustus Caesar was asked about the future of Roman religion, it's safe to bet that they would have been confident that for many centuries to come, sacrifices would be offered to Jupiter and the other gods in their temples. That didn't turn out to be the case, as you know. I'm far from sure that Christianity is as firmly fixed in place in the American collective imagination as you seem to be, and the statistics aren't trending that way, either; while I think it's entirely possible that American Christianity may survive as a minority religion, the future contains more possibilities than a simple revival of existing forms.

As for being a Druid, well, it's always a gamble to do the right thing rather than the popular one, you know.

Phil, many thanks!

Richard, I may just have to do a post one of these days about the weird obsession with cultural necromancy that's seized so much of the modern collective imagination. How many rehashes can you do of the rehashes of the rehashes of what was once an original idea? We're clearly going to find out. As for deconstructing the deconstructionists, all in good time; it's worth remembering that deconstruction is what jackals do to dead lions -- and eventually, to dead jackals as well.

Joseph, in theory, yes. In practice, raising taxes to the level that would support current extravagance would be economically disastrous as well as politically impossible.

Iuval, my assumption here is that the US government is playing jiggery-pokery with figures to make the deficit look lower than it is, just as it's doing the same sort of massaging to the unemployment and inflation rates, etc. Thus the very rough rounding upwards to "around half." Is it an estimate? You bet. Could it be wrong? Of course -- but even so, a nation that pays a third of its bills by borrowing is not in much better shape than one that pays half of them by borrowing, you know. Either way, the rising debt load ends up breaking you.

Chris, just as a matter of detail, "conspiracy" does not come from the same root as "piracy"! It comes from Latin "con-" and "spiro," to breathe -- literally to breathe together; the image is of people clustered around a table so closely that they're breathing each other's breaths. Beyond that -- well, it would take a full post to respond to any of your major points, and I'll pass just at the moment. ;-)

Phil H, exactly. Will it get better? Maybe, temporarily -- but my guess is that it's going to get a whole lot worse first.

Dagnarus, I'd encourage you to check your theory against economic history. The US government, for example, had a strictly balanced budget through the late 19th century, when private business was heaping up unparalleled fortunes; thus I think there's something amiss with your claim that the public sector has to run a deficit for the private one to run a profit!

I work out here in the public and have found myself stating frequently, to those who attempt to draw me into conversation about the government shutdown, this one simple thing....If you're still taking sides, you've missed the entire point.

Winter's coming, I'll have more time to read. You and your commentors are first on my list of "must reads".

I am an Episcopalian. In my local congregation, the pastor realizes that the Federal Government is no longer able to provide proper help to low/no income people. My church already has a soup-kitchen that has sit-down lunches on Monday, Wednesday, and Friday. My pastor also has a plan in place to provide WIC products to mothers, if the WIC program becomes unavailable.

About this socialism discussion going on here, I must go with Bill Pulliam: "Peak oil means peak socialism" is a brilliant observation.

I have to agree with Juhana in this case. The leftist intellectuals might well pick up Marx again, but getting a mass audience amid the competing populisms will be a different matter, even with the infomercials for class war being inadvertently provided by the right. I suspect however the blue collar types following the right-wing populists will probably find they are binge taken along for a ride, and not an enjoyable one at that...

Firstly my understanding is that for the majority of the private sector at that time was a life of bitter impoverishment, secondly I said either the private sector is in deficit or your country is net exporting to another nation, which the US was at that time. Anyway would you agree that the only way that the private sector can have a net increase in their bank accounts (i.e. on average everyone has more money), without adding an equal amount of private sector debt, is if the government runs a deficit, either through borrowing or printing money?

@ Everyone else:Speaking of interesting, it was an interesting evening around here! We had a lady in a late model Honda Pilot pull into the driveway before dinner, visibly shaken, calling the police (for whatever reason) and her insurance company about the big deer she had just hit.

Well, my foraging brain started spinning, and, after making sure she and her children were OK, I went looking for the deer. After about a minute of searching the road shoulders I found a fresh, warm, 6-point buck lying dead on our side of the road, grabbed it by the antlers, and dragged it (laboriously) back to my back patio, where I gutted it - massive internal bleeding and all, gave it and my tools and patio a wash down, and hung it to chill in the chilly night air in a big dogwood tree till morning.

Road kill windfall...yeah. I'm not too proud for that. My brother's bringing a bunch of pig fat and a couple of his best sausage recipes up from Atlanta Thursday.

Something pleasantly visceral about being elbow-deep in a large mammal while thinking about feeding your children over winter.

No worries, I got the joke. It's just that there are a great many different perspectives here and they might not have got the joke, hence the explanation.

Plus the definition of weed is pretty clever (can’t remember where I read it, but I think it is attributed to Bill Mollison).

Yeah, I've eaten kangaroo (best not overcooked as it gets tough). It is very tasty. A mate brought some kangaroo steaks around last Christmas day. I suspect they thought that it would be amusing (or they're scared of vegetarian food). hehe! But if someone else has gone to the effort of killing and butchering the animal, then it is only respectful to consume it with respect.

I know a local lady who claims to have eaten wallaby as a youth and reckons it made a pretty decent ox tail stew (they have big tails). Can't see why it wouldn't be that different from a kangaroo - maybe a bit more gamey due to the different diet (similar niche to deer).

Wouldn't recommend eating a koala, as they eat a toxic brew of eucalyptus leaves (and usually no water). Fun fact: Apparently they are drunk most of the time. They certainly sleep a lot.

Hi Nano,

Kudos for the 80's film references! I'm not sure why they would approve though?

haha! I raise you an even more obscure 80's film reference: Tom Hank's finest acting hour in the 1984 film Bachelor Party.

What about Bill Murray in the 1980 film Caddyshack? Funny stuff.

Dunno, but your comment has the feel of mystery in need of an explanation.

Yeah, I expect a lot of funny business to go on before a new equilibrium is reached. Whatever that is anyway?

The Aussie dollar is rising again and is near parity with the US dollar (again) as a direct result of QE. This is a real nuisance for us down under as imports are becoming way too cheap. China may be facing problems of over capacity (sound familiar?).

The WTO has overturned an import ban on apples from New Zealand and China and they are now available at $1/kg which is half the price of any previous year that I can recall. I only ever purchase locally grown apples.

Now there's a couple of little unmentioned problems:

Firstly, those two countries have a real problem with fire blight in their apple, pear and loquat orchards; and

Secondly, as those countries are dumping product here (I'm assuming this), the local orchards can't compete. I certainly can't produce apples for a $1/kg.

It's all a bit weird.

Meanwhile, there are some photos of the bushfires. Tomorrow is not going to be good (low humidity, high heat and strong winds). Please spare a thought for the people affected:

"In his “Future of an Illusion,” Sigmund Freud argued that the faithful clung to God’s existence in the absence of evidence because the alternative — an empty void — was so much worse. Modern beliefs about economic prospects are not so different. Policy makers simply pray for a strong recovery. They opt for the illusion because the reality is too bleak to bear. But as the current fiscal crisis demonstrates, facing the pain will not be easy. And the waking up from our collective illusions has barely begun."

Note: his wake-up is only partial. He does not mention natural resources at all. And I disagree with most of his proposed remedies.

It confirms my perception of people’s expectations too: How can so many, expect so much, from so few?

After the Black Saturday fires in 2009, more than a few people in the city told me, "The CFA (country fire authority) - who are mostly volunteers that actually fight the fires - are gonna cop it." I was pretty incensed by those reactions because the volunteers were out for long periods of unpaid time for weeks on end in hazardous conditions fighting fires at serious personal risk for a dysfunctional community. Yet they were expected to somehow do better? Pah!

Interestingly too, after the Royal Commission into the fires – it appeared (and I could well be wrong) - that there were calls for the head of the CFA to fall onto his sword, which he did.

By the way, peak oil and peak resources, also means the peak of the cult of individualism. There are certainly diminishing returns from that cultural sphere.

JMG,I don't know if you read this deep into a post's comments section, but here is a link to a blog entry I just posted in response to your contest announced back in your Jan. 9th, 2013 post entitled, "A Wish List for Krampus".

http://sunlitsynergy.blogspot.com/

Thanks so much for all of your clarity. It truly is such a gift.Take care

Chris G said:: ‘Selfishness and greed - wanting more and more and more - like a psychopath or sociopath - are institutionalized; those motives are built into the system’.I have my personal theory about this wanting more and more. It’s more innocently to ‘keep up with the Joneses’, to be able to belong to the group.

As an example, I regularly rub shoulders with people who belong to a much wealthier social category than I do, so I can’t share in the interests and worries, like going to galas, holidays abroad, the latest smart phone, playing golf, expensive schools and activities for the children, or problems with the driver or maid. I don’t envy their lifestyles, since I’ve made my own environmental and social choices in life and have my own circle of friends and family, but it’s a fact that it would be nearly impossible for me to become friends with any of them because I would be unable to participate.

About consumerism, a major cog of our social and economic system, I was rereading yesterday a 2010 article in Resurgence Magazine by Sophie Poklewski Koziell about planned obsolescence, and in particular psychological obsolescence, i.e. people wanting to replace something because it has gone out of fashion, and how this was initiated in the 1920s in the USA by the car industry, and later taken up by the other types of producers that had problems with overproduction since consumers’ ‘real needs’ had been satisfied with the first generation of electric home appliances.

In a way one could say that consumerism, the capacity to acquire the latest fashion, has even become integrated among the universal human rights.

Dear JMG, I stumbled on your blog a few weeks ago. This is Strange enough on its own, because the topics you are discussing are common language for me, following the peak oil and Climate crisis at least from 2005 and maybe even before.

I thought that my general vision of affairs was quite complete, but your post have changed my landscape more than a bit.

I missed a lot of connections (mostly concerning human attitude), and was completely missing the spiritual part, or theosphere, in the framework.

Reading your posts, so rightly filling the holes, was an experience, just like reading enlightening books as Jared Diamond's ones.

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About JMG

John Michael Greer is the Grand Archdruid of the Ancient Order of Druids in America and the author of more than thirty books on a wide range of subjects, including peak oil and the future of industrial society. He lives in Cumberland, MD, an old red brick mill town in the north central Appalachians, with his wife Sara.

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